Question 18 On 1 January 2019. Baker Ltd (which prepares accounts to 31 December) enters into a four-year lease of office machinery. The company is required to make four lease payments of 150,000 and these fall due on 1 January 2019, 2020, 2021 and 2022 The rate of interest implicit in the lease is 9% per annum. How much should be the value of the right-of-use asset at 1 January 2019? a) 379,694 b) 529,694 c) 150,000 d) 600,000 (3 marks) Question 19 A company uses the indirect method for reporting cash flows from operating activities. During an accounting period, inventories have risen by 75,000, trade receivables have fallen by 60,000 and trade payables have risen by 45,000. When calculating the net cash inflow or outflow from operating activities, the required adjustments are as follows: a) Subtract 75,000. Add 60,000, Subtract 45,000 b) Add 75,000, Subtract 60,000, Add 45,000 c) Add 75,000, Subtract 60,000. Subtract 45,000 d) Subtract 75,000, Add 60,000, Add 45,000 (3 marks) Question 20 Operating profit, after deducting loss on asset disposal of 102,000 and depreciation amounting to 174,000, has been reported as 2,527,500. Changes in working capital items in the year were as shown in the table below. Calculate the cash generated by operating activity for inclusion in a statement of cash flows prepared on the indirect method. Inventory increased by 63.000 Receivables decreased by 163.500 Payables decreased by 37.500 Accrued expenses increased by 24,600 a) 2,527,500 b) 2,688,600 c) 2,891,100 d) 2,789,100 (4 marks)