Star Ltd is a retailer which sells blankets. The following information is available for the year ended 31 August 2015:
Statement of financial position of Star Ltd as at 31 August 2015
|
|
2015
|
2014
|
|
R
|
R
|
|
Non-current assets:
|
|
|
|
Equipment
|
53000
|
27000
|
|
|
|
|
|
Current assets:
|
|
|
|
Inventory
|
4000
|
3800
|
|
Bank
|
21300
|
12300
|
|
|
25300
|
16100
|
|
|
|
|
|
Total assets
|
78300
|
43100
|
|
|
|
|
|
Equity:
|
|
|
|
Share capital: class A
|
33000
|
25000
|
|
Retained earnings
|
22500
|
4000
|
|
|
55500
|
29000
|
|
Non-current liberties:
|
|
|
|
Long-term loans
|
15500
|
4000
|
|
|
|
|
|
Current liabilities:
|
|
|
|
SARS (income tax)
|
3000
|
2100
|
|
Income received in advance
|
2200
|
1600
|
|
Trade payables
|
2100
|
6400
|
|
|
7300
|
10100
|
|
|
|
|
|
Total equity and liabilities
|
78300
|
43100
|
Statement of comprehensive income of Star Ltd for the year ended 31 August 2015
|
|
R
|
|
Sales income
|
122000
|
|
Cost of sales expense
|
(43000)
|
|
Gross profit
|
79000
|
|
Net operating costs
|
(44000)
|
|
Operating profit
|
35000
|
|
Interest expense
|
(4200)
|
|
Profit before tax
|
30800
|
|
Taxation expense
|
(12300)
|
|
Net profit for year
|
18500
|
Additional information
1. Net operating costs reported on the statement of comprehensive income for the year ended 31 Augus 2015 included the following items:
|
Bad debts expense
|
2000
|
|
Wages expense
|
24000
|
|
Rent expense
|
10000
|
|
Depreciation expense
|
4000
|
|
Profit on disposal of equipment
|
3000
|
2. 20 000 Class A shares were issued for 50c each during the year. and share issue costs of R2 000 were incurred and paid during the year.
3. No dividends were declared during the year ended 31 August 2015.
4. During the year. Equipment with a carrying amount of R20 000 was sold.
5. The company raised loans of R14 000 during the year ended 31 August 2015. You are required to:
Prepare the cash flow statement of Star Ltd for the year ended 31 August 2015. Using the indirect method.