How to solve this past year cash flow practise question? It would be great if explanations/workings are provided!
QUESTION 2 (40 marks) The following gives the summary Statements of Financial Position for Loh Company at the end of two consecutive financial years 20x2 and 20x1. Amounts are in S$. 20x2 20x1 Assets Cash in hand 1,050 1,150 Short-term money market instruments 790 1,520 Marketable equity securities 490 543 Net Accounts Receivable 1,370 1,320 Inventories 9,374 9,432 Prepayments to suppliers 600 800 Net Property, Plant and Equipment 28,127 23,727 Liabilities Bank overdraft 143 137 Accounts payable 2,175 2,323 Prepaid revenues 947 933 Wages payable 133 139 Interest payable 493 437 Tax payable 172 149 Long-term debt 23,471 21,473 Dividend payable 342 34 Equity Shareholders' capital 3,000 3,000 Retained earnings 10,925 9,560 Additional information: 1. Marketable equity securities are classified as held for trading. There is high turnover in this portfolio. 2. Equipment with an original cost of S$2,000 was sold in 20x2 for cash. The remaining life at the time of disposal was 30 percent of the original life. The gain on disposal was S$100. This gain is included in taxable profits. 3. Equipment worth S$8,930 was purchased during 20x2 for cash. 4. Revaluation losses on marketable equity securities were S$433 in 20x2. These losses cannot be claimed as a taxable expense. 5. A customer account with balance S$323 was written off in 20x2. 6. The allowance for doubtful customer accounts increased by S$574 in 20x2.- 10 - ACC1002 7. Sales revenue was S$39,939 in 20x2, of which S$31,743 was credit sales. 8. For advance payments from customers, goods are always shipped within 90 days after the advance payment. 9. Inventory purchases during 20x2 totaled S$19,432. 10. All inventories are stated at cost based on FIFO. 11. All goods purchased with payment in advance are delivered within 90 days of the advance payment. 12. Wages expense for 20x2 was S$8,523. 13. Interest expense for 20x2 was S$4,137. 14. Income tax expense for 20x2 was 17 percent of profits before tax. 15. None of the long-term debt at end-20x1 was due within less than two years. There were no early repayments of debt in 20x2. 16. For all cash flow statement items where FRS 7 allows a choice of which section to include them in, the company's policy is to NOT include these items in the cash flow from operating activities section. 17. There were no revenues and expenses apart from those mentioned or implied in this question. Required: a) Present the cash flow from operating activities section of the cash flow statement for 20x2 using the direct method. (18 marks) b) Present the cash flow from investing activities section of the cash flow statement for 20x2. (8 marks) c) Present the cash flow from financing activities section of the cash flow statement for 20x2. (11 marks) d) Present a reconciliation of the net change in cash and cash equivalents, showing the individual component balances