Question

Lesedi Company (Pty) Ltd.’s balance sheets for the last two years are provided below

Balance Sheet	2019	2018
Cash	R 82 000	R 40 000
Accounts Receivable	180 000	150 000
Inventory	170 000	200 000
Equipment	200 000	140 000
Accum. Depreciation	(72 000)	(60 000)
Total Assets	R560 000	R470 000
Accounts Payable	R100 000	R 80 000
Long-term Payables	100 000	50 000
Ordinary Shares	250 000	250 000

Retained Earnings 110 000 90 000 Total Liabilities &          Shareholders’ Equity R560 000   R470 000

The company’s income statement for 2019 is provided below

Income Statement	2019
Sales	R345 000
Expenses:
Cost of Goods Sold	R120 000
Operating Expenses	58 000
Depreciation Expense	20 000
Interest Expense	2 000
	200 000
Operating Income	145 000
Gain on Sale-- Equipment*	5 000
Income before Taxes	150 000
Tax Expense	30 000
Net Income/profit	R120 000
The company sold equipment for R57 000 that had a cost of R60 000 Required: Prepare the company’s Statement of Cash flow for 2019. Use the direct method for calculating the cash flows from operating activities.                                                        (15)

Answer 1