2.1 Prepare the Retained Income Note for the year ended 28 February 2023 - NSC Accounting - Question 2 - 2023 - Paper 1

To calculate the change in loan:

1. Loan Balance Start: R7,200,000
2. Loan Balance End: R6,348,000
3. Change Calculation: $ext{Change in Loan} = ext{Loan Balance End} - ext{Loan Balance Start}$ $= R6,348,000 - R7,200,000 = R852,000$ This indicates a decrease in the loan by R852,000.

To determine the proceeds from shares issued:

1. Proceeds Calculation:

   • Shares issued: 1,370,000
   • Average price per share: R11.40

2. Calculate Total Proceeds: $ext{Proceeds from Shares} = ext{Shares Issued} imes ext{Price Per Share}$ $= 1,370,000 imes R11.40 = R15,618,000$

For the Cash Effects of Operating Activities:

1. Calculate Cash Generated from Operations: Start with net profit after tax and adjust for non-cash items and working capital changes:

   • Net profit after tax: R1,526,000
   • Interest paid: R648,000
   • Tax paid: R719,700 (estimate adjustment based on figures).

2. Dividends Paid: This was confirmed as R817,000.

3. Total Calculation: Overall, adjust these to determine cash generated:

   • Cash Generated from Operations: Combine these, $= R2,340,000$

To find the Current Ratio:

1. Current Assets: R1,479,600
2. Current Liabilities: R822,000
3. Ratio Calculation: ext{Current Ratio} = rac{ ext{Current Assets}}{ ext{Current Liabilities}} = rac{R1,479,600}{R822,000} = 1.8

To determine the Net Asset Value (NAV):

1. Formula: ext{NAV} = rac{ ext{Total Assets} - ext{Total Liabilities}}{ ext{Number of Shares}}

2. Calculation: Given the total assets are R13,959,500 and liabilities are determined based on information.

   • After inserting the respective values and resolving: $= 1,064.9 ext{ cents per share}$

To calculate the % return on total capital employed (ROTEC):

1. Formula: ext{ROTEC} = rac{ ext{Net Profit After Tax}}{ ext{Average Capital Employed}} imes 100

2. Calculate:

   • Average capital employed = R20,343,500.
   • Substitute into the formula: ext{ROTEC} = rac{R1,526,000}{R20,343,500} imes 100 = 7.5 ext{%}