Which of the following alternatives represents the correct amount that must be disclosed as cash receipts from customers in the cash generated from operations section according to direct method in the statement cash flows of Honey Limited for the year ended 30 September 2022? 1. 686 000 2. 796 400 3. 606 000 4. 750 000 5. 850 200
he information below relates to questions 1 – 16.
The following information pertains to Honey Limited.
Extract from ledger account balances as at 30 September:
| 2022 | 2021 | |
| R | R | |
| Share capital: Ordinary shares | 380 500 | 338 300 |
| Share capital: |
291 000 | 264 700 |
| 66 200 | 48 400 | |
| Long-term loan - ABC Bank | 88 000 | 120 000 |
| Land and buildings at cost | 623 000 | 401 000 |
| Machinery and equipment at carrying amount | 262 300 | 222 700 |
| Inventory | 83 500 | 73 000 |
| Trade receivables control | 92 700 | 83 300 |
| Listed investments | 110 000 | 0 |
| Bank | 25 200 | 46 300 |
| Trade payables control | 66 500 | 52 600 |
| SARS (income tax) | 63 400 | 48 700 |
| Dividends payable | 46 200 | 62 000 |
| Dividends receivable | 0 | 0 |
| Accrued expenses (wages) | 0 | 11 400 |
| Prepaid expenses | 11 200 | 4 200 |
| Revenue | 805 800 | |
| Cost of sales | 392 400 | |
| Administrative, distribution and other expenses | 160 200 | |
| Fair value gain on listed investments | 8 600 | |
| Dividends income | 20 800 | |
| Loss on sale of machinery and equipment | 10 100 | |
| Income tax expense | 55 200 | |
| 15 500 | ||
| Wages | 84 400 | |
| Insurance expense | 14 100 |
2. Additional information
2.1 The following pertains to property, plant and equipment:
During the year machinery and equipment with a carrying amount of R95 000 was sold for cash. This transaction has been correctly recorded.
Land and buildings with a cost price of R110 000 were sold for cash at the same amount. Land and buildings are not depreciated.
All purchases of property, plant and equipment pertained to replacements and were paid in full.
2.2 On 29 September 2022 Honey Limited declared ordinary shares dividend of 50 cents per share whilst the preference shares dividends amounted to R40 800.
2.3 The interest expense paid on the long-term loan amounted to R16 800 and is not yet recorded.
2.4 On 31 August 2022, when the total number of ordinary shares issued were 120 000 shares, the shareholders approved the capitalisation issue of one (1) ordinary share for every four (4) ordinary shares held. The capitalisation issue was done from retained earnings at R0,50 per share. All other issued shares were paid for in cash.
QUESTION 1
Which of the following alternatives represents the correct amount that must be disclosed as cash receipts from customers in the cash generated from operations section according to direct method in the statement cash flows of Honey Limited for the year ended 30 September 2022?
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Which of the following alternatives represents the correct amount that must be disclosed as proceeds from issue of shares in the financing activities section in the statement cash flows of Honey Limited for the year ended 30 September 2022?
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