(a) Prepare a cash flow statement (indirect method) for Best Slumber Pte Ltd for the year ended 31st March 2019.

(b) It has been argued that cash flow statements are more reliable than financial statements prepared under the accruals convention. Briefly examine this argument.

The following are the summarized accounts of Best Slumber Pte Ltd for the two years ended 31 March 2019 and 2020: 2020 2019 Financial Positions as at 31st March Fixed assets Tangible assets (net book value) Investments 1,200 200 1,400 1,166 140 1,306 Current assets Inventory Debtors Prepayments Cash at bank Total Current Assets Total Assets 780 500 80 25 1,385 2,785 610 460 50 105 1,225 2,531 760 690 Current Liabilities Creditors falling due within 1 year Non-Current Liabilities: Loans Total Liabilities 660 1,420 700 1,390 Capital and reserves Share capital - ordinary shares of $1 each Share premium Retained earnings 650 110 605 1,365 490 90 561 1,141 Total Liabilities and Equity 2,785 2,531 Profit and Loss accounts for the year ended 31st March Turnover Cost of sales Gross profit Distribution costs Administrative expenses Operating profit Investment income Profit before interest and tax Interest Profit on ordinary activities before taxation Taxation of profit on ordinary activities Profit on ordinary activities after taxation 2,020 5,110 (3,650) 1,460 (390) (275) 795 30 825 (36) 789 (320) 469 2,019 3,940 (2.800) 1,140 (320) (220) 600 8 608 (42) 566 (280) 286 150 The following further information is available: (1) The following movements on the tangible fixed assets accounts occurred during the year. Cost Accumulated Net Depreciation Book Value As at 1st April 2019 1,542 376 1.166 Addition at cost 324 324 Disposal (220) (80) (140) Depreciation for year (150) As at 31st March 2020 1.646 446 1.200 The assets were disposed of for sale proceeds of $160m, any profit or loss was included as part of expenses in the profit and loss account. (2) The investments are shares held for long term and the change in value is due to new purchases during the year. (3) Creditors falling due within one year are made up of: 2020 2019 Trade Payables 124 144 Tax payables 320 280 Bank overdraft 306 258 Interest payable 10 8 760 690 (4) There was an issue of shares made on the 31 January 2019 at a premium for cash consideration and dividends were declared and paid