The following information pertains to Tse’hlanyane CC: 1. Selected items from th

Question

The following information pertains to Tse’hlanyane CC:

1. Selected items from the statement of financial position as at 30 June:

2. Selected items from the statement of profit or loss and other comprehensive income of Tse’hlanyane

CC for the year ended 30 June 2018:

Additional information:

1. No land and buildings were sold during the year; it is the policy of the company to only sell fixed assets for cash. Land with a cost of R50 000 was bought on credit.

2. The fixed deposit and additional member's contribution was made in cash.

3. Tse’hlanyane CC uses the direct method when preparing the cash flow statement.

4. All purchases of inventory are on credit.

QUESTION?

Which one of the following alternatives represents the correct amount relating to the net cash from

financing activities, which is to be disclosed in the statement of cash flows of Tse’hlanyane CC for the

year ended 30 June 2018?

1. R 60 000

2. R 70 000

3. R110 000

4. R100 000

2018 2017 Member's contribution: Dee ........................................................................ 300 000 200 000 Member's contribution: Sam ........................................ 400 000 350 000 Trade payables control (Trade creditors) ............... 30 560 59 400 Non-current portion of long-term loan (Mbhovu Bank) ... 80 000 120 000 Current portion of long term loan (Mbhovu Bank) ......... 40 000 80 000 Retained earnings ............................................................. 80 760 65 700 Current tax payable ................................... 8 900 4 400 Land and buildings at cost ........................... 259 050 153 600 Furniture and equipment at carrying amount ............ 23 200 33 600 Fixed deposit ........................................... 90 000 - Accrued expense (Water and electricity) ............ 10 040 5 100 Inventory ................................................. 39 400 40 600 Investment: Shares in Wengweni Limited ............... 105 000 -

Explanation / Answer

Ans C 110000

Solution: Increase in member contribution=300000+400000-200000-350000=150000

Less: Repayment in long term loan = 120000-80000=40000

Net cash flow from financing activities=150000-40000= 110000

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