K. Further bad debts of R1 400 must be written off. Provision for bad debts is to be maintained at 6% of good book debts. L. One of the employees who was on sick leave was omitted from the Salaries Journal for July 2015. Her salary details were as follows: Employers’ Gross Salary Deductions Net salaries contribution ? R5 000 R12 000 R3 000 M. Income tax for the financial year is calculated as R53 325. This is 30% of the net profit before tax. The amount for the Auditors' fees is the balancing figure in the Income N. statement. 65 QUESTION 4 CASH FLOW STATEMENT, INTERPRETATION AND RATIO ANALYSIS (60 marks; 35 minutes) You are provided with information relating to Neonell Hardware Ltd, a public company whose financial year ends annually on 28 February. REQUIRED: 4.1 Explain the difference between a Balance Sheet and a Cash Flow Statement. (2) 4.2 Calculate the following amounts as it would appear in the Cash Flow Statement on 28 February 2015: Dividends paid (5) Cash flow from financing activities (10) Net change in cash and cash equivalents (4) 4.3 At the AGM a shareholder stated that she is unhappy about the bank overdraft on 28 February 2015. She feels that the directors made some poor decisions that resulted in this situation. Explain TWO such decisions, with relevant figures, to support her opinion. (6) 4.4 Calculate the following financial indicators for the year ended 28 February 2015: 4.4.1 Acid test ratio (5) 4.4.2 Net asset value per share (3) 4.4.3 Debt-equity ratio (3)
K. Further bad debts of R1 400 must be written off. Provision for bad debts is to be maintained at 6% of good book debts. L. One of the employees who was on sick leave was omitted from the Salaries Journal for July 2015. Her salary details were as follows: Gross Salary Deductions Net salaries Employers’ contribution ? R5 000 R12 000 R3 000 M. Income tax for the financial year is calculated as R53 325. This is 30% of the net profit before tax. N. The amount for the Auditors' fees is the balancing figure in the Income statement. 65 QUESTION 4 CASH FLOW STATEMENT, INTERPRETATION AND RATIO ANALYSIS (60 marks; 35 minutes) You are provided with information relating to Neonell Hardware Ltd, a public company whose financial year ends annually on 28 February. REQUIRED: 4.1 Explain the difference between a Balance Sheet and a Cash Flow Statement. (2) 4.2 Calculate the following amounts as it would appear in the Cash Flow Statement on 28 February 2015: Dividends paid (5) Cash flow from financing activities (10) Net change in cash and cash equivalents (4) 4.3 At the AGM a shareholder stated that she is unhappy about the bank overdraft on 28 February 2015. She feels that the directors made some poor decisions that resulted in this situation. Explain TWO such decisions, with relevant figures, to support her opinion. (6) 4.4 Calculate the following financial indicators for the year ended 28 February 2015: 4.4.1 Acid test ratio (5) 4.4.2 Net asset value per share (3) 4.4.3 Debt-equity ratio (3)