ACC2014 FINANCIAL ACCOUNTING QUESTION

Note: Kindly answer in typed words format

The summarised financial statements for Delcom Berhad for the years ended 31 December 2019 and 2020 are as follows: Statement of Financial Position as at 31 December 2019 and 31 December 2020 2020 2019 RM000 RM'000 RM'000 RM'000 Non-current assets Property, plant and equipment 281.00 274.00 Development expenditure 45.00 37.00 326.00 311.00 Current assets: Inventories 144.00 148.00 Trade receivables 118.00 123.00 Investments 20.00 5.00 Bank 61.00 343.00 6.00 282.00 Total assets 669.00 593.00 Equity and liabilities: Ordinary shares of RM 1 each Retained earnings 150.00 355.00 505.00 90.00 _315.00 405.00 Non-current liabilities: Long term borrowing Deferred tax 36.00 5.00 41.00 6.00 7.00 13.00 Current liabilities: Trade payables Current tax payable 105.00 18.00 123.00 669.00 166.00 9.00 175.00 593.00 Statement of Profit or Loss for the year ended 31 December 2020 RM'000 Revenue 455.20 Less: Cost of sales 333.00 Gross profit 122.20 Less: Operating expenses 32.00 90.20 Less: Finance costs 8.00 Profit before tax 82.20 Less: Income tax expense 17.20 Profit after tax for the year 65.00 You are provided with the following additional notes: (1) During the year, amortisation of RM6,000 was charged on development expenditure. (2) Depreciation charged on property, plant and equipment in 2020 totalled RM76,000. During the year, a motor vehicle with a carrying value of RM40,000 was sold at a profit of RM5,000. The gain on disposal was netted off against operating expenses. On 29 December 2020, the company obtained a loan of RM120,000 from a bank to pay for a new motor vehicle. (3) During the year, Delcom Berhad paid an interim dividend and a final dividend to its shareholders (4) The current asset investments are short term bonds. The company classify themas cash equivalents. Required: (a) Prepare a statement of cash flows of Delcom Berhad for the year ended 31 December 2020 under the indirect method. You are required to show all the relevant workings. (b) Draft suitable notes to the statement of cash flows. (c) The directors of Delcom Berhad consider the statement of cash flows is not usefulfor their daily operations. You are required to explain the importance of statementof cash flows based on the conceptual framework to the directors of Delcom Berhad