QUESTION 2 (37 Marks: 58 minutes) Here is the statement of financial position for Ilvico Ltd as at 30 June 20x6. Ilvico Ltd STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 20x6 N$ Notes 20x6 20x5 ASSETS Non-current assets 6 400 000 400 000 Property, plant and equipment 685 000 625 000 Accumulated depreciation (285 000) (225 000) Current assets 685 000 550 000 Inventories 7 325 000 265 000 Accounts receivable 8 285 000 225 000 Cash and cash equivalents 75 000 60 000 TOTAL ASSETS 1 085 000 950 000 EQUITY AND LIABILITIES Capital and reserves 652 500 525 000 Ordinary share capital 2 400 000 325 000 Distributable reserves General reserve 135 000 100 000 Retained earnings 117 500 100 000 Non-current liabilities 175 000 100 000 Long term borrowings 3 175 000 100 000 Current liabilities 257 500 325 000 Short-term borrowings 0 45 000 Accounts payable 222 500 250 000 Shareholders for dividends 35 000 30 000 TOTAL EQUITY AND LIABILITIES 1 085 000 950 000 Additional information: 1. On 30 June 20x6, property, plant and equipment that had cost N$25 000 (and on which depreciation of N$15 000 was provided) were sold for N$5 000. 2. On 30 June 20x6, the company made a capitalisation issue of one ordinary share for every three held by the shareholders. For this purpose an amount of N$75 000 was transferred from retained earnings. 3. On 15 December 20x5 an Interim dividend of N$17 500 was declared and paid. 4. On 30 June 20x6, a final dividend of N$35 000 was declared Page 18 of 21 5. The Income tax expenses for the year came to N$25 000. Include in payables was the SARS: Income tax account with a closing balance of N$3 750 and an opening balance of N$2 500. 6. Interest paid during the year amounted to N$750 000. 7. Revenue for the year amounted to N$750 000. You are required to: 1. Prepare the statement of cash flows for the year ended 30 June 20x6 to conform to the requirements of IAS 7 according to the direct method. (28 marks) 2. Prepare the note to the statement of cash flows: Reconciliation of profit before tax with cash generated from operation (9 mark