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

The change in the loan can be calculated by subtracting the previous year's loan balance from the current year's loan balance:

• Current loan: R7,200,000
• Previous loan: R6,348,000

Thus, the calculation is:

$ext{Change in loan} = 7,200,000 - 6,348,000 = R852,000$

To determine the proceeds from shares issued, calculate:

• Shares repurchased by the company = 1,370,000 - 250,000 = 1,120,000, where R11.40 per share is applicable.

The formula used is:

$ext{Proceeds from shares issued} = 300,000 imes 11.40 = R3,420,000$

The Cash Effects of Operating Activities are calculated based on components such as operating cash and dividends paid. Using the values derived:

• Cash generated from operations: R2,340,000
• Interest paid: R648,000
• Dividends paid: R817,000

Thus, the final entries reflect:

$ext{Cash Effects of Operating Activities} = ext{Cash generated from operations} - ext{Interest paid} - ext{Dividends paid}$

Final amount obtained is:

$155,200$

The current ratio reflects the company's ability to cover its liabilities with its short-term assets:

• Current assets: R1,479,600
• Current liabilities: R822,000

The ratio formula is:

ext{Current ratio} = rac{ ext{Current assets}}{ ext{Current liabilities}} = rac{1,479,600}{822,000} = 1.8

Net asset value provides insights into total assets versus liabilities:

• Total assets = R13,959,500 + R629,600
• Total liabilities = R1,370,000

The calculation can be framed as:

ext{Net asset value (NAV)} = rac{ ext{Total Assets}}{1,370,000} = 1,064.9 ext{ cents}

The % return on total capital employed helps determine the efficiency of capital utilization:

Using the formula:

ext{ROTCE} = rac{ ext{Net profit after tax}}{ ext{Average capital employed}} imes 100

Substituting in our values:

ext{ROTCE} = rac{1,526,000}{20,343,500} imes 100 = 7.5 ext{%}