2 Below is the Income Statement of LAGENDA TI Enterprise for the financial year ended 30 June 2022. LAGENDA TI Enterprise Income Statement for the year ended 30 June 2022. LAGENDA TI Enterprise issued a batch of notes payable for $500,000 on 01 February 2022. During the year, the owner invested a fresh capital of $400,000 cash in LAGENDA TI Enterprise. The interest and sundry operating expenses were paid as they arose. REQUIRED: (a) Prepare a detailed Cash Flow Statement of LAGENDA TI Enterprise for the year ended 30 June 2022. (16 marks) Sales $2,400,000 Less: Cost of goods sold Gross Profit 1,200,000 1,200,000 Profit on sale of office equipment 2,000 1,202,000 Less: Expenses Depreciation expense 90,000 Insurance expense 30,000 Interest expense 10,000 Rent expense. 105,000 Salary expense 300,000 Sundry operating expense 7,000 Net income 542,000 660,000 During the financial year, the following changes were noted: Accounts Cash at bank As at 30 June 2022 Amount Not Given As at 30 June 2021 $90,000 Accounts receivable $210,000 $250,000 Inventory $110,000 $140,000 Prepaid insurance $3,000 $11,000 Accounts payable $150,000 $200,000 Salary payable $0 $16,000 Rent payable $12,000 Additional data were given below: LAGENDA TI Enterprise bought and paid cash two brand new motor vehicles for $70,000 each. An old motor vehicle was sold for $4,000 cash, which it had a carrying value of $4,000 at the time of sale. A fully depreciated computer was sold for $2,000 cash. LAGENDA TI has paid $900,000 cash to buy a piece of land and building. (b) The owner of LAGENDA TI Enterprise could not understand the cash flow statement that you have prepared. Explain the cash flow statement to the owner. (4 marks)