Highlands Ltd

Tshehla Ltd, purchased a 65% shareholding in Highlands Ltd on 1 April 2016 for R575 000. At that date, Highlands Ltd had 200 000 ordinary shares in issue. On 1 August 2019, an additional 10 000 shares were purchased from another shareholder for R60 000, bringing the total shareholding to 70%. Highlands Ltd has not issued any additional shares since Tshehla Ltd became a shareholder. As at 31 December 2019, Highlands Ltd ordinary shares had a market value of R6,50 per share.

2. A vehicle with a cost of R400 000 and a carrying value of R300 000 was sold during the year. Profit on the disposal amounted to R200 000. In addition, another vehicle with a cost of R400 000 and accumulated depreciation of R150 000 was involved in an accident and written off. An insurance claim was submitted and the insurance company paid out R300 000 on the claim.

3. On 31 December 2019, equipment with a cost price of R2 880 000 and accumulated depreciation of R2 808 000, as at that date, was withdrawn and scrapped.

On 25 October 2019, an order to the amount of R4 200 000 was placed to replace the abovementioned equipment item. The replacing equipment item was received on 29 November 2019 and put into service by Tshehla Ltd on 1 December 2019. On 1 December 2019 an amount of R1 200 000 was paid to the supplier. The outstanding amount of R3 000 000 is payable on 31 January 2019.

4. To assist in their water purification assessments, Tshehla Ltd purchased computer software worth R980 000 on 1 January 2017. At the date of purchase it was estimated that the software would have an expected useful life of 5 years with no residual value. New software was purchased on 1 July 2019.

5. A loan of R5 000 000 was obtained from Beta Bank on 1 January 2019. Interest is charged at 12% per annum. Capital and interest on the loan are repayable in five equal instalments on 31 December each year.

REQUIRED:

d) Prepare only the following sections of the Statement of cash flows of Tshehla Ltd for

the reporting period ended 31 December 2019: (30)

 The “Cash flows from investing activities”.

 The “Cash flows from financing activities”.