QUESTION $1(20$ Marks$)$

REQUIRED

Study the Statement of Cash Flows given below and answer the following questions:

$1\mathrm{.}1$ Calculate the amount paid out for company tax. $(3$ marks$)$

$1\mathrm{.}2$ Did the company obtain funds from its financing activities? Motivate your answer with the relevant

calculations. $(3$ marks$)$

$1\mathrm{.}3$ Of what significance are the details of Westham Limited$$s investing activities to a potential investor? $(4$

marks$)$

$1\mathrm{.}4$ Write a report to the board of directors to provide an interpretation of the Statement of Cash Flows of

Westham Limited for the year ended $31$ December $2022.$ Your report must focus on the cash flows from

operating activities, increase in inventory, increase in receivables, increase in payables and purchase of

plant and equipment. $(10$ marks$)$

INFORMATION

The Statement of Cash Flows of Westham Limited for the year ended $31$ December $2022$ appears below:

WESTHAM LIMITED

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED $31$ DECEMBER $2022$

R

Cash flows from operating activities $(540000)$

Operating profit $2850000$

Non$-$cash flow adjustment:

Depreciation $1058700$

Profit before working capital changes $3908700$

Working capital changes $(2424000)$

Increase in inventory $(2400000)$

Increase in receivables $(1800000)$

Increase in payables $1776000$

Cash generated from operations $1484700$

Dividends paid $(1200000)$

Company tax paid $?$

Cash flows from investing activities $(6900000)$

Purchase of plant and equipment $(6900000)$

Cash flows from financing activities $?$

$??$

Net increase $($decrease$)$ in cash $?$

Cash balance $(31$ December $2021)9600000$

Cash balance $(31$ December $2022)2100000$