BUS021 (2022) QUESTION 3 Page 5 The cash flows below were extracted from the accounts of Willow Ltd shop owner. Net cash equivalent at beginning of period total 160. Acquisition of subsidiary Proceeds from issue of share capital Cash paid to suppliers and employees Purchase of property, plant and equipment Proceeds from long-term borrowings Interest paid Income taxes paid 550 250 27,600 350 250 270 900 200 90 20 30,150 200 1,200 270 Dividends received Payment of finance lease liabilities Proceeds from sale of equipment Cash receipts from customers Interest received Dividends paid Cash and cash equivalents at end of period (31/12/20) Required: a) Prepare a statement of cash flows using the direct method for the year ended 31 December 2020. [10 marks] b) Prepare a separate reconciliation statement to see how this relates to the cash of the business at the beginning and end of the year. [5 marks] c) What does the statement of cash flows tell us about a business. [15 marks] [Total Marks 30]