INFORMATION The information provided below was extracted from the accounting records of Harmony Limited on 31 December 2020: Harmony Limited Extract of Statement of Comprehensive Income for the year ended 31 December 2020 R Sales 6 600 000 Cost of sales (3 900 000) Gross profit 2 700 000 Operating expenses (1 710 000) Selling and administrative expenses 1 260 000 Depreciation 450 000 Operating profit 990 000 Interest expense (270 000) Profit before tax 720 000 |Company tax (240 000) Profit after tax 480 000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Can you please help me prepare the Cash Flow Statement of Harmony Limited for the year ended 31 December 2020.

INFORMATION
The information provided below was extracted from the accounting records of Harmony Limited on 31 December 2020:
Harmony Limited
Extract of Statement of Comprehensive Income for the year ended 31 December 2020
R
Sales
6 600 000
Cost of sales
(3 900 000)
Gross profit
2 700 000
Operating expenses
(1 710 000)
Selling and administrative expenses
1 260 000
Depreciation
450 000
Operating profit
990 000
Interest expense
(270 000)
Profit before tax
720 000
Company tax
(240 000)
Profit after tax
480 000
Extract of Statement of Changes in Equity for the year ended 31 December 2020
Retained
earnings
R
Balance on 01 January 2020
1 500 000
Profit after tax
480 000
Dividends paid and proposed in 2020
(180 000)
Balance on 31 December 2020
1 800 000
Transcribed Image Text:INFORMATION The information provided below was extracted from the accounting records of Harmony Limited on 31 December 2020: Harmony Limited Extract of Statement of Comprehensive Income for the year ended 31 December 2020 R Sales 6 600 000 Cost of sales (3 900 000) Gross profit 2 700 000 Operating expenses (1 710 000) Selling and administrative expenses 1 260 000 Depreciation 450 000 Operating profit 990 000 Interest expense (270 000) Profit before tax 720 000 Company tax (240 000) Profit after tax 480 000 Extract of Statement of Changes in Equity for the year ended 31 December 2020 Retained earnings R Balance on 01 January 2020 1 500 000 Profit after tax 480 000 Dividends paid and proposed in 2020 (180 000) Balance on 31 December 2020 1 800 000
Balances extracted from the Statement of Financial Position as at 31 December:
2020
2019
R
R
Plant and equipment
3 750 000
3 000 000
Investments
210 000
240 000
Inventories
1 290 000
1 230 000
Accounts receivable
1 140 000
1 050 000
Cash and cash equivalents
300 000
210 000
Ordinary share capital
1 860 000
1 860 000
Retained earnings
1 800 000
1 500 000
Long-term loan
360 000
210 000
Accounts payable
2 520 000
1 962 000
Dividends payable
120 000
150 000
Income tax payable
30 000
48 000
Note:
(a)
Plant and equipment was purchased but there was no disposal.
(b)
The number of ordinary shares in issue was 930 000.
(c)
All purchases and sales of inventory were on credit.
(d)
Credit terms to debtors are 30 days. Debtors took approximately 28 days to settle their accounts during 2019.
Transcribed Image Text:Balances extracted from the Statement of Financial Position as at 31 December: 2020 2019 R R Plant and equipment 3 750 000 3 000 000 Investments 210 000 240 000 Inventories 1 290 000 1 230 000 Accounts receivable 1 140 000 1 050 000 Cash and cash equivalents 300 000 210 000 Ordinary share capital 1 860 000 1 860 000 Retained earnings 1 800 000 1 500 000 Long-term loan 360 000 210 000 Accounts payable 2 520 000 1 962 000 Dividends payable 120 000 150 000 Income tax payable 30 000 48 000 Note: (a) Plant and equipment was purchased but there was no disposal. (b) The number of ordinary shares in issue was 930 000. (c) All purchases and sales of inventory were on credit. (d) Credit terms to debtors are 30 days. Debtors took approximately 28 days to settle their accounts during 2019.
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