NEXT MILLENIUM RETAILSERVICES STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2022

	R
Cash flows from operating activities	(1 150 000)
Profit before interest and tax (Operating profit)	2 750 000
Adjustments to convertto cash from operations:
Non-cash flow adjustments	475 000
Depreciation	500 000
Profit on disposal of equipment	(25 000)
Profit before workingcapital changes	3 225 000
Working capitalchanges	(3 000 000)
Increase in Inventory	(2 250 000)
Increase in receivables	(1 250 000)
Increase in payables	500 000
Cash generated from operations	225 000
Interest paid	(125 000)
Dividends paid	(500 000)
Company tax paid	?
Cash flows from investing activities	(525 000)
Non-current assetspurchased	(750 000)
Proceeds from disposal of equipment	225 000
Cash flows from financing activities	?
Proceeds from issue of ordinary shares	?
Increase in long-term borrowings	400 000
Net decrease in cash and cash equivalents	(675 000)
Cash and cash equivalents at the beginning of the year	550 000
Cash and cash equivalents at the end of the year	?

Based on the extracts of the Cash Flows Statement of NMRS provided above, answer the following questions:

1. 1. Calculate NMRS’s cash balance at the close of business on 30 June 2022 and state whether the balance is favorable or unfavorable.
2. 2. Compute the proceeds from the issue of ordinary shares by NMRS during the financial year ended 30 June 2022.
3. 3. Determine the tax paid by NMRS during the financial year ended 30 June 2022. 
4. 4. Calculate the carrying value of the equipment sold during the financial year ended 30 June 2022. 
5. 5. By examining the cash flows from the investing activities undertaken by NMRS during the financial year ended 30 June 2022, briefly discuss a probable strategic intent of the management of NMRS.
6. 6. Provide a meaningful interpretation of the extracts of NMRS’s cash flow statement by discussing any three important points. 

Answer rating: 100% (QA)

1To calculate NMRSs cash balance at the close of business on 30 June 2022 Starting cash balance 550000 Cash generated from operations 225000 Cash flow... View the full answer