You are provided with the followinginformation for KB Ltd for the reportingperiod ended 31 March 2023:

Statement of profitor loss

Additional informationRRevenue 22 000000Cost of sales (8 500000)Gross profit 13 500000Other income1.670 000Income from subsidiary1.1 850000Income from financial investments1.980 000Distribution, Administration andOther costs (10 020000)Finance costs2.(470 000)Profit before tax1.6 510000Income tax expense (980 000)Profit for the year 5 530000

In addition to the above,the following balanceswere extracted from the Statement of financialposition at 31 March 2023 along with the respective comparative balances for the previousyear.

Additional information

2023

R

2022

R

Property, plantand equipment3.6 278 0007 400 000Building-under-construction4.1 250 000-Investment property5.2 050 0001 750 000Investment in listed shares5.1 800 0002 100 000Investment in subsidiary5.2 050 0002 050 000Trade receivables 3 190 0002 350 000Trade inventories 1 450 0002 050 000Share Capital (4 330 000)(3 450 000)Retained earnings (4 420 000)(2 080 000)Long term portion: Loan Magnolia Bank (1 250 000)(1 500 000)Specific loan: Building-under-construction (1 400 000)-Bank overdraft (1 973 000)(4 770 000)Trade payables (2 980 000)(4 200 000)Current portion: Loan Magnolia Bank (250 000)(500 000)Shareholders for dividends (945 000)(550 000)Income tax payable (520 000)(650 000) --

1. The Profit before tax note to the statement of profit or loss for the reporting period ended 31 March 2023 reflects, amongst others, the following items:

RIncome Profit on thesale of vehicle120 000Proceeds on insurance claim for damagedinventory550 000 Expenses Loss on fairvalue adjustment on investment property105 000Bad debts (resulting from an adjustment of allowance for doubtful debts)220 000Write-down of inventory to net realisable value115 000

Income from the subsidiary comprises dividends and management fees of R1 800 000 and R50 000 respectively, while Income from financial investments also comprises dividends received.

Other relevant income/expenses and profits/losses are reflected else wherein the question or can be derived from the information provided elsewhere in the question.

1. In the current reporting period R115 000 was incurred on interest on the specific loan for a qualifying asset (building-under-construction). Interest income on surplusfunds that were invested on the specific loan was R45 000. It is the policy of KB Ltd to capitalise borrowing costs to qualifying assets.

All the interest costs incurred on all borrowings were paid during the reporting period.

1. The followingis a presentation of the Property, plant and equipment note for the reporting period.

PlantVehiclesTotalCarrying amount beginning of theyear6 450 000950 0007 400 000Gross carrying amount10 500 0002 000 00012 500 000Accumulated depreciation(4 050 000)(1 050 000)(5 100 000)Accumulated impairment Acquisitions 1 413 0001 413 000 Disposal/Derecognition(550 000)(330 000)(880 000)Gross carrying amount(800 000)(750 000)(1 550 000)Accumulated depreciation250 000420 000670 000 Depreciation(1 125 000)(480 000)(1 605 000)

Impairment (50 000)(50 000) Gross carrying amount9 700 0002 663 00012 363 000Accumulated depreciation(4 925 000)(1 110 000)(6 035 000)Accumulated impairment (50 000)(50 000)Carrying amount end of year4 775 0001 503 0006 278 000

All acquisitions and disposals of vehicles were on a cash basis. The vehicle that was sold was subsequently replaced.

The de-recognition of the plant refers to a separable section of the plant that was donated to a local non-profit organisation that assiststhe local community with entrepreneurial projects.

1. All costs incurred on the building-under-construction were paid for in cash during the reporting period.

1. In addition all disposals and/or acquisitions on the investment property, investment in listed shares and investment in subsidiary were on a cash basis.

REQUIRED:

Present the Statement of cash flows of KB Ltd for the reporting period ended 31 March 2023 according to the direct method.

Note:

• Ignore VAT.
• Show all calculations as marks are awarded for these.