Assignment
Centurion Ltd
Information extracted from the Statement of Comprehensive Income for the year ended 31 December 2015 and 2014:
|
|
2015(R)
|
2014(R)
|
|
Sales
|
1 856 000
|
1 200 000
|
|
Cost of sales
|
(1 280 000)
|
(750000)
|
|
Gross profit
|
576 000
|
450 000
|
|
Operating expenses
|
(291 200)
|
(212 000)
|
|
Depreciation
|
30 000
|
26 000
|
|
Other operating expenses
|
261 200
|
186 000
|
|
Operating profit
|
284 800
|
238 000
|
|
Interest on mortgage loan
|
(24 000)
|
(72 000)
|
|
Net profit before tax
|
260 800
|
166 000
|
|
Income tax
|
(90 240)
|
(58 100)
|
|
Net profit after tax
|
170 560
|
107 900
|
Information extracted from the Statement of Financial Position as at 31 December 2015 and 2014.
|
2015(R)
|
2014( R )
|
|
ASSETS
|
|
|
|
Non-current assets
|
2 464 160
|
2 444 000
|
|
Property, plant and equipment (fixed assets)
|
2 464 160
|
2 444 000
|
|
Current assets
|
356 000
|
338 000
|
|
Inventories (all Trading stock)
|
120 000
|
250 000
|
|
Trade & other receivables
|
40 000
|
64 000
|
|
Cash & cash equivalents
|
196 000
|
24 000
|
|
2 820 160
|
2 782 000
|
|
QUITY AND LIABILITIES
|
|
|
|
Equity
|
2 437 560
|
1 980 000
|
|
Ordinary share capital (issued at R10 per share)
|
1 900 000
|
1 600 000
|
|
Share premium
|
280 000
|
160 000
|
|
Retained income
|
257 560
|
220 000
|
|
Non-current liability (Mortgage loan, 12% p.a.)
|
200 000
|
602 000
|
|
Current liabilities
|
182 600
|
200 000
|
|
Trade & other payables
|
98 000
|
138 000
|
|
SARS (Income tax)
|
8 600
|
6 000
|
|
Shareholders for dividends
|
76 000
|
56 000
|
|
2 820 160
|
2 782 000
|
Additional information
New shares were issued on the first day of the financial year.
Interim and final dividends for the year ended 31 December 2015 amounted to R133 000.
Fixed assets were sold at carrying (book) value during the year for R144 000.
Required:
1. Study the information provided by Centurion Limited and prepare the statement of cash flows (using the indirect method) for the year ended 31 December 2015.
2. Study the statement of cash flows prepared in 1.1 above and comment on your findings.