Reference no: EM131806625

Star Ltd is a retailer which sells blankets. The following information is available for the year ended 31 August 2015:

Statement of financial position of Star Ltd as at 31 August 2015

	2015	2014
	R	R
Non-current assets:
Equipment	53000	27000
Current assets:
Inventory	4000	3800
Bank	21300	12300
	25300	16100
Total assets	78300	43100
Equity:
Share capital: class A	33000	25000
Retained earnings	22500	4000
	55500	29000
Non-current liberties:
Long-term loans	15500	4000
Current liabilities:
SARS (income tax)	3000	2100
Income received in advance	2200	1600
Trade payables	2100	6400
	7300	10100
Total equity and liabilities	78300	43100

Statement of comprehensive income of Star Ltd for the year ended 31 August 2015

	R
Sales income	122000
Cost of sales expense	(43000)
Gross profit	79000
Net operating costs	(44000)
Operating profit	35000
Interest expense	(4200)
Profit before tax	30800
Taxation expense	(12300)
Net profit for year	18500

Additional information

1. Net operating costs reported on the statement of comprehensive income for the year ended 31 Augus 2015 included the following items:

Bad debts expense	2000
Wages expense	24000
Rent expense	10000
Depreciation expense	4000
Profit on disposal of equipment	3000

2. 20 000 Class A shares were issued for 50c each during the year. and share issue costs of R2 000 were incurred and paid during the year.

3. No dividends were declared during the year ended 31 August 2015.

4. During the year. Equipment with a carrying amount of R20 000 was sold.

5. The company raised loans of R14 000 during the year ended 31 August 2015. You are required to:

Prepare the cash flow statement of Star Ltd for the year ended 31 August 2015. Using the indirect method.