Prepare the Ordinary Share Capital Note on 28 February 2021 - NSC Accounting - Question 2 - 2021 - Paper 1

To find the % operating expenses on sales:

• Operating Expenses: R1,458,600
• Sales: R7,293,000

The formula to calculate this is:

ext{% Operating Expenses} = rac{ ext{Operating Expenses}}{ ext{Sales}} imes 100

Putting in the values:

rac{1,458,600}{7,293,000} imes 100 = 20 ext{%}

Thus, the % operating expenses on sales is 20%.

To calculate the Dividend per Share:

• Total Dividends Paid: R162,000
• Number of Shares: 870,000

Using the formula:

ext{Dividend per share} = rac{ ext{Total Dividends}}{ ext{Number of Shares}}

Substituting in the values:

rac{162,000}{870,000} ext{ cents} = 18.62 ext{ cents} ext{ per share}

Rounded to the nearest cent, it is 18.6 cents per share.

To calculate the % return on average shareholders’ equity:

• Net Profit After Tax: R985,500
• Total Shareholders' Equity: R6,450,000 (at beginning) + R8,038,100 (at end)

First, we find the Average Shareholders’ Equity:

ext{Average Equity} = rac{(6,450,000 + 8,038,100)}{2} = 7,244,050

Then, we use the formula to calculate the return:

ext{Return} = rac{ ext{Net Profit}}{ ext{Average Equity}} imes 100

So, substituting the values:

rac{985,500}{7,244,050} imes 100 = 13.6 ext{%}

Thus, the % return on average shareholders’ equity is 13.6%.

To complete the Cash Flow Statement, we analyze the cash flows from operating, investing, and financing activities.

• Cash Generated from Operations: R1,180,000
• Interest Paid: (429,500)
• Taxation Paid: (292,500)
• Dividends Paid: (270,300)

Net Cash Flow from Operating Activities:

$$1,180,000 - 429,500 - 292,500 - 270,300 = 187,700$$

For investing activities, assume no additional cash inflows or outflows beyond those provided.

For financing activities

• Shares issued: R409,000
• Shares repurchased: (291,000)
• Loan repaid: (80,000)

Summing these values will yield the complete cash flows for the year. After calculating, Net Change in Cash and Cash Equivalents can be determined.