Answer ALL questions (30 MARKS QUESTION 1 20 Marks) REQUIRED Use the information provided below to prepare the Cash Flow Statement of Fairmont Limited for the year ended 31 December 2019. Use the following format as a guide. (Commence with the profit before working capital changes of R240000.) CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2019 Cash flows from operating activities Profit before working capital changes Working capital changes Increase/decrease in inventory Increase/decrease in receivables 240 000 Answer ALL questions. [30 MARKS) QUESTION 1 (20 Marks) REQUIRED Use the information provided below to prepare the Cash Flow Statement of Fairmont Limited for the year ended 31 December 2019. Use the following format as a guide. (Commence with the profit before working capital changes of of R240 000.) CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2019 R 240 000 Cash flows from operating activities Profit before working capital changes Working capital changes Increase/decrease in inventory Increase/decrease in receivables Increase/decrease in payables Cash generated from operations Interest paid Interest income Dividends paid Income tax paid Net cash inflow from operating activities Cash flow from investing activities Non-current assets purchased investments increase/redeemed Net cash flow from investing activities Cash flow from financing activities Proceeds from issue of ordinary shares Long-term borrowings increase/decrease Net increase/decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year INFORMATION Fairmont Limited Statement of Comprehensive Income for the year ended 31 December 2019 R Sales 1 100 000 Cost of sales (650 000) Gross profit 450 000 (285 000) Operating expenses Selling and administrative expenses (210 000) (75 000) Depreciation Operating profit 165 000 Interest expense (45000) Profit before tax Income tax 120 000 (40 000) 80 000 Profit after tax Statement of Financial Position as at 31 December: Assets 2019 (R) 2018 (R) 540 000 Non-current assets 660 000 1 200 000 1 000 000 Plant and equipment Accumulated depreciation (575 000) (500 000 Investments 35 000 40 000 Current assets 455 000 415 000 Inventories 215 000 205 000 Accounts receivable 190 000 175 000 Cash and cash equivalents 50 000 35 000 1115 000 955 000 Total assets 610 000 560 000 310 000 310 000 300 000 250 000 360 000 335 000 Equity and liabilities Equity Ordinary share capital (155 000 shares) Retained earnings Non-current liabilities Current liabilities Accounts payable Dividends payable Income tax payable 145 000 60 000 120 000 27 000 20 000 25 000 5 000 8 000 1 115 000 955 000 Total owners' equity and liabilities Note: . Dividends paid and recommended during 2019 amounted to R30 000 All purchases and sales of inventories are on credit. Purchases for the year ended 31 December 2019 amounted to R660 000 (10 Marks) QUESTION 2 REQUIRED Use the information provided in Question 1 to calculate the following ratios for 2019 (answers rounded off to two decimal places): 21 Inventory turnover (1 mark) 2.2 Average collection period (1 mark) 2.3 Average payment period [1 mark 2.4 Return on equity (1 mark) 2.5 Gross profit margin (1 marko 2.6 Earnings per share [1 mark) 2.7 Dividends per share [1 marke 28 Current ratio 11 mars (1 mark) 2.9 Acid test ratio 2.10 Debt to assets (1 mark)