QUESTION 1REQUIREDUse the information provided below to prepare the Cash Flow Statement of Umhlali Limited for the year ended 31December 2020.INFORMATIONThe following Information was extracted from the records of Umhlali Limited for the past two years:STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER:2020 (R)2019 (R)Sales1 856 0001 200 000Cost of sales(1 280 000)(750 000)Gross profit576 000450 000Operating expenses(291 200)(212 000)Depreciation30 00026 000Other operating expensesOperating profit261 200186 000284 800238 000Interest on mortgage loan(24 000)(72 000)Profit before tax260 800166 000Company tax(90 240)(58 100)Profit after tax170 560107 900 Information extracted from the Statement of Financial Position for the past two years:STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER:2020 (R)2019 (R)ASSETSNon-current assets2 464 1602 444 000Fixed assets2 464 1602 444 000Current assets356 000336 000Inventories (all Trading inventory)120 000250 000Accounts receivable40 00064 000Cash & cash equivalents196 00022 0002 820 1602 780 000EQUITY AND LIABILITIESEquity2 437 5601 980 000Ordinary share capital2 180 0001 760 000Retained income257 560220 000Non-current liabilities200 000600 000Mortgage loan (12% p.a.)200 000600 000Current liabilities182 600200 000Accounts payable98 000138 000SARS (Company tax)8 6006 000Shareholders for dividends76 00056 0002 820 1602 780 000Additional information1 The issue price of all the shares is R10 each. New shares were issued on the first day of the financialyear.Interim and final dividends for the year ended 31 December 2020 amounted to R133 000.Fixed assets were sold at carrying (book) value during the year for R144 000. Fixed assets were alsopurchased.

Cash Flow Statement-Cash flow statement refers to the financial statement that provides aggregate…

assets 2 464 160 444 000 Fixed assets 2 464 160 2 444 000 Current assets 356 000 336 000 Inventories (all Trading inventory) 120 000 250 000 Accounts receivable 40 000 64 000 Cash & cash equivalents 196 000 22 000 2 820 160 2 780 000 EQUITY AND LIABILITIES Equity Ordinary share capital Retained income 2 437 560 1 980 000 2 180 000 257 560 200 000 1 760 000 220 000 600 000 Non-current liabilities Mortgage loan (12% p.a.) Current liabilities 200 000 600 000 182 600 200 000 Accounts payable 98 000 138 000 SARS (Company tax) 8 600 6 000 Shareholders for dividends 76 000 56 000 2 820 160 2 780 000 Additional information The issue price of all the shares is R10 each. New shares were issued on the first day of the financial year. Interim and final dividends for the year ended 31 December 2020 amounted to R133 000. Fixed assets were sold at carrying (book) value during the year for R144 000. Fixed assets were also purchased.

assets 2 464 160 444 000 Fixed assets 2 464 160 2 444 000 Current assets 356 000 336 000 Inventories (all Trading inventory) 120 000 250 000 Accounts receivable 40 000 64 000 Cash & cash equivalents 196 000 22 000 2 820 160 2 780 000 EQUITY AND LIABILITIES Equity Ordinary share capital Retained income 2 437 560 1 980 000 2 180 000 257 560 200 000 1 760 000 220 000 600 000 Non-current liabilities Mortgage loan (12% p.a.) Current liabilities 200 000 600 000 182 600 200 000 Accounts payable 98 000 138 000 SARS (Company tax) 8 600 6 000 Shareholders for dividends 76 000 56 000 2 820 160 2 780 000 Additional information The issue price of all the shares is R10 each. New shares were issued on the first day of the financial year. Interim and final dividends for the year ended 31 December 2020 amounted to R133 000. Fixed assets were sold at carrying (book) value during the year for R144 000. Fixed assets were also purchased.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter21: The Statement Of Cash Flows

Section: Chapter Questions

Problem 7MC

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