1. The statement of cash flows, or the cash flow statement is a financial statement that summarizes the amount of cash and cash equivalents entering and leaving a company. The cash flow statement (CFS) measures how well a company manages its cash position, meaning how well the company generates cash to pay its debt obligations and fund its operating expenses. You are financial manager of GALAXY plc and you need to prepare the cash flow statement for your stakeholders. To prepare cash flow statement, required information (Statement of Financial Position and Statement of Profit or Loss) are presented detailed in the following. Study the following balance sheets of GALAXY plc, and profit and loss account for the year ended 31 May, Year 2021. GALAXY plc Statement of Financial Position as at 31 May, 2021. Non-Current Assets: Fixed Assets (Cost) Depreciation Year, 2020 ($) ($) 180,000 40,000 140,000 10,000 150,000 Year, 2021 ($) ($) ($) 260,000 60,000 200,000 5,000 205,000 Investment (Cost) Current Assets: Stock Debtors Banks 50,000 30,000 10,000 60,000 47,000 18,000 90,000 240,000 125,000 330,000 0 50,000 Total Assets Long-Term Liabilities Debentures Current Liabilities Creditors Provision for tax Provision for dividends 17,000 16,000 12.000 18,000 18,000 14,000 45,000 45,000 50,000 100,000 Total Liabilities Equity or Capital Ordinary shares Share premium account Retained earnings (B/F) 170,000 17,000 8,000 200,000 20,000 10,000 Total Liabilities and Equity 195,000 240,000 230,000 330.000 GALAXY plc Statement of Profit or Loss Year ended 31 May, 2021 $ Operating Profit 30,000 + Profit on investment 4,000 34,000 (-) Provision for taxation (18,000) 16,000 + Retained earnings B/F 31/5/2020 8,000 24,000 (-) Provision for dividends (14,000) Retained earnings C/F 31/5/2021 10.000 GALAXY plc Statement of Profit or Loss Year ended 31 May, 2021 $ Operating Profit 30,000 + Profit on investment 4,000 34,000 (-) Provision for taxation (18,000) 16,000 + Retained earnings B/F 31/5/2020 8,000 24,000 (-) Provision for dividends (14,000) Retained earnings C/F 31/5/2021 10,000 ***Note: No tangible fixed assets were disposed of during the year but $5,000 of investment had been sold for $9,000.*** Required 1. The reconciliation of profit for operations to net cash from operating activities for the year ended 31 May, 2021. 2. Prepare a Statement of Cash Flows for the year ended 31 May, 2021. 3. If you were financial manager of GALAXY plc, what benefit will you get from preparation and interpretation of data received from cash flow statement? 4. From cash flow statement, which decision should you make for GALAXY plc. 5. You need to explain to top managers why your company prepares a cash flow statement in addition to an income statement and the statement of financial position annually