1. **Stating the problem:** Prepare the cash flows from operating activities and cash flows from investing activities sections of Qina Cement CC's statement of cash flows for the year ended 28 February 2025 using the direct method. 2. **Analyze operating cash receipts:** - Sales revenue: R323700 (from sales section) - Adjust for changes in trade and other receivables: $$\text{Increase in receivables} = 22800 - 18500 = 3300$$ Increase means cash collected is less by this amount. 3. **Calculate cash received from customers:** $$323700 - 3300 = 320400$$ 4. **Analyze cash paid to suppliers (cement, clinker, packaging):** - Cost of sales: R184000 - Adjust for change in trade and other payables (creditors): $$18500 - 17600 = 900$$ Increase in payables means cash paid less by R900. - Adjust for change in inventory: $$61400 - 57700 = 3700$$ Increase in inventory means cash paid more by R3700. 5. **Calculate cash paid to suppliers:** $$184000 + 3700 - 900 = 186800$$ 6. **Cash paid for salaries and remuneration:** - Salaries to members: R38400 - Remuneration accounting officer: R10800 - Total cash paid: $$38400 + 10800 = 49200$$ 7. **Cash paid for other operating expenses:** - Water and electricity: R2000 - General expenses: R2800 - Interest on long-term loan: R7700 8. **Cash paid for income taxes:** - Income tax expense: R26400 9. **Calculate net cash from operating activities:** **Cash received from customers:** R320400 **Less cash paid:** - Suppliers: R186800 - Salaries/remuneration: R49200 - Other expenses & interest: $$2000 + 2800 + 7700 = 12500$$ - Income taxes: R26400 Total cash paid: $$186800 + 49200 + 12500 + 26400 = 274900$$ Net cash flow (operating activities): $$320400 - 274900 = 45500$$ 10. **Prepare cash flows from investing activities:** - Property, plant and equipment increased from R119600 to R180500 - Increase = $$180500 - 119600 = 60900$$ - Furniture carrying amount decreased from 21500 to 15000 - Decrease = $$21500 - 15000 = 6500$$ which represents a sale. - Profit on sale of furniture = 600 - Sale proceeds = carrying amount + profit = $$6500 + 600 = 7100$$ - Calculate purchase of property, plant and equipment: $$60900 + 7100 = 68000$$ (total cash paid for PPE acquisition) - So cash flows from investing activities: - Cash paid for property, plant and equipment: R68000 (outflow) - Cash received from sale of furniture: R7100 (inflow) Net cash outflow from investing activities: $$68000 - 7100 = 60900$$ **Final answers:** - Net cash from operating activities: R45500 inflow - Net cash from investing activities: R60900 outflow