80.2K

Verified Solution

Link Copied!

QUESTION FOUR [25] The following information was extracted from the accounting records of Mode Ltd for the financial year ended 30 June 2020. Extract from: Statement of Profit or loss and other comprehensive income of Mode Ltd for the year ended 30 June 2020 R Gross profit Dividends received Profit on sale of machine Depreciation Interest expense Distribution, administration and other expenses Taxation Profit for the year after taxation 1 440 000 43 000 75 000 (15000) (180 000) (403 000) (420 000) 540 000 Extract from: Statement of financial position of Mode Ltd as at 30 June 2020: ASSETS 30 June 2020 30 June 2019 R R Land and buildings 925 000 890 000 Machinery at carrying amount 875 000 250 000 Investments 235 000 385 000 Inventory 170 000 480 000 Trade debtors 140 000 400 000 Receiver of revenue - income tax 10 000 Bank balance 30 15 000 Total assets) 2 385 000 2 420 000 Ni EQUITY AND LIABILITIES 1565 000 940 000 EQUITY Ordinary share capital Retained earnings 745 000 820 000 480 000 460 000 820 000 1 480 000 LIABILITIES Long term Borrowings Trade creditors Receiver of revenue - income tax Shareholders for dividends Total equity and liabilities 750 000 60 000 NI 10 000 1 050 000 352 000 43 000 35 000 2 385 000 2 420 000 Additional information: 1. Shares were issued for cash during the year. 2 Dividends of R180 000 were declared during the current financial year. 3. On 31 October, machinery with a carrying amount of R110 000 was sold for cash. A replacement machine as well as additional machinery was purchased for cash No long term borrowings were made during the year 5. Investments were sold during the year. No new investments were purchased. Required: Take all the above information into account and prepare the statement of cash flows for Mode Ltd for the year ended 30 June 2020. Use the indirect method. Your answer must comply with the International Financial Reporting Standards (IFRS) appropriate to this type of business. Show all workings. Round off all workings to the nearest Rand. (25)

Answer & Explanation Solved by verified expert

See Answer