Question $4(30$ Marks$)$

Fabz Limited is a fast growing company that manufactures toys and baby accessories. You have been employed by Fabz Limited for more than four years, assisting them in the preparation of the financial statements, and due to your exceptional expertise, your assistance is needed in the preparation of the statement of cashflows for the year ended $28$ February $2023.$

The following was taken from the records of Fabz Limited:

FABZ LIMITED

STATEMENT OF FINANCIAL POSITION AS AT $28$ FEBRUARY $2023$

$20232022$

N$ N$

ASSETS

Non$-$current assets $442500462750$

Land and buildings at cost $300000375000$

Vehicles at cost $12000022500$

Accumulated depreciation: Vehicles $(30000)(2250)$

Equipment at cost $8250082500$

Accumulated depreciation: Equipment $(30000)(15000)$

Current assets $502750241500$

Inventory $142500127500$

Trade debtors $6000052500$

Rent income accrued $22501500$

Prepaid expenses $8000-$

Cash and cash equivalents $29000060000$

TOTAL ASSETS $945250704250$

EQUITY AND LIABILITIES

Equity $419250507400$

Share capital $371250461400$

Retained earnings $4800046000$

Non$-$current liabilities $318150129850$

$10\%$ Interest$-$bearing loan: Playful Financial Services $318150129850$

Current liabilities $207850113000$

Trade creditors $3850044250$

Short$-$term portion of long$-$term loan $15000065000$

Accrued expenses $-3750$

Accrued interest expense $19350-$

TOTAL EQUITY AND LIABILITIIES $945250704250$

FABZ LIMITED

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED $28$ FEBRUARY $2023$

$2023$

N$

Sales $600000$

Cost of sales $(450000)$

Gross profit $150000$

Other income: $30400$

Rent income $14400$

Profit on sale of vehicle $1000$

Profit on sale of land $15000$

Operating expenses $(91750)$

Depreciation $(52000)$

Loss on sale of equipment $(750)$

Sundry operating expenses $(39000)$

$88650$

Finance costs $(40650)$

Profit before tax $48000$

Additional information:

$1.$ Fabz limited obtained an additional $10\%$ loan from Playful Financial services on $01$ September $2022.$ The total loan from Playful Financial Services is repayable in instalments of N$$150000$ each on $28$ February of each year.

$2.$ Included in share capital is $60100$ redeemable preference shares with a par value of N$$1\mathrm{.}50$ per share. These shares were redeemed at par on $30$ October $2022.$

$3.$ Equipment with a cost price of N$$15000$ and accumulated depreciation of N$$3000$ was sold during the year. New equipment was purchased to replace the equipment sold.

$4.$ Vehicles:

$$ A new vehicle for use in the business was purchased during the year at a cost of N$$127400.$

$$ Total depreciation for the year on all the vehicles amounted to N$$34000.$

$$ One of the old vehicles with carrying amount of N$$23650$ was sold during the year.

$5.$ Vacant land was sold during the year for cash.

$6.$ Assume that finance costs for the year have been calculated correctly.

REQUIRED:

$1.$ Prepare the statement of cash flows of Fabz Limited in compliance with IAS $7$ Statement of cash flows, for the year ended $28$ February $2023$ using the direct method indicating Investing, financing and Cash and cash equivalents. $(24$ marks$)$