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

The change in loan is calculated as follows:

Change in Loan = Loan at the end - Loan at the beginning = R7 200 000 - R6 348 000 = R852 000.

To determine the proceeds from shares issued:

Proceeds from shares issued = Share capital at end of year - Share capital at beginning of year = R13 959 500 - R12 312 500 + R1 773 000 = R3 420 000.

Begin by calculating cash generated from operations:

Cash generated from operations: R2 340 000 Please note interest paid:

• Interest paid: R648 000
• Income tax paid: R23 600

Now, proceed to cash outflows for dividends paid: Dividends paid = R342 400 + R579 400 = R921 800.

Finally, compile the cash flows from operating activities:

• Total Cash Inflows and Outflows adjustments must be made for taxes and dividends.

The Current Ratio is calculated by dividing current assets by current liabilities:

Current Ratio = Total current assets / Total current liabilities = R1 479 600 / R822 000 = 1.8.

To find the Net Asset Value (NAV):

NAV = (Total Assets - Total Liabilities) / Shares Outstanding = (R13 959 500 + R629 600) / R1 370 000 = R1 064.9 cents.

The % return on total capital employed is calculated as follows:

ROTEC = (Net profit after tax / Average Capital Employed) * 100 = (R1 526 000 / R20 343 500) * 100 = 7.5%.