(ii) Prepare the Statement of Cash Flows for Lucy Ltd, in accordance with NZ IAS 7 Statement of Cash Flows, for the year ended 31 March 2021.

(iii) Prepare the Statement of Cash Flows for Lucy Ltd, in accordance with NZ IAS 7 Statement of Cash Flows, for the year ended 31 March 2021 but assume Lucy Ltd uses the direct method for reporting cash flows from operating activities.

(iv) Review the two SCFs, and state three significant concerns of Lucy Ltd. Explain your concerns

Question 3

In Question 1, Lucy Ltd classified interest expense paid, and dividends paid as cash flows from financing activities.

What if Lucy Ltd had used the alternative classification for these two items?

Complete the table in the answer booklet to illustrate the effect of using a different classification, for these two items, on the Statement of Cash Flows and note.

Ensure you provide detail of the part/s of the CFOA (and Reconciliation) affected. For example: After the cash generated from operations line.

please use as the template that are provided

please show all working out (if there are any)

The following information has been extracted from the financial records of Lucy Ltd: + As at: 31 March 2021 31 March 2020 Cash $1 500 $275 Accounts receivable 6 345 5 600 Allowance for DD 320 290 Inventory 7 000 7 240 GST receivable/payable 20 Dr 81 Cr Plant and equipment - at cost 55 025 50 000 Accumulated Depreciation 16 000 13 500 Bank overdraft 900 200 Accounts payable 7492 5 396 Interest expense payable 10 15 Dividends payable 150 70 Income tax payable 200 30 Long-term borrowings 3 000 Share capital 15 000 9 000 Retained earnings 26 818 34 533 For the year ended 31 March 2021: Sales $70 000 Cost of goods sold 48 000 Operating expenses 24 690 Doubtful debts expense 310 Interest expense 165 Depreciation expense 3 200 Loss on sale of plant and equipment 500 Tax expense 400 Additional information: 1. Lucy Ltd uses the indirect method for reporting cash flows from operating activities. 2. The entity classifies dividends paid and interest paid as cash flows from financing activities. 3. An item of equipment was sold for $2,000 cash. + Question 1 (i) Statement of Cash Flows for Lucy Ltd for the year ended 31 March 2021. Cash flows from operating activities: Non-cash items: Deferrals/Accruals: Items included in the determination of PBT classified as investing financing activities: Items included in the determination of PBT classified separately as operating activities: Cash generated from operations $ $ Net cash fused / from operating activities Cash flows from investing activities: Net cash from used in) investing activities $ Question 1 (ii) Statement of Cash Flows for Lucy Ltd for the year ended 31 March 2021 continued: Cash flows from financing activities: $ Net cash from used in) financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of period Cash and cash equivalents at the end of period $ Question 1 (ii) Statement of Cash Flows for Lucy Ltd for the year ended 31 March 2021 Cash flows from operating activities $ Cash generated from operations $ $ Net cash (used in) from operating activities Cash flows from investing activities: $ Net cash from used in) investing activities Cash flows from financing activities: $ Net cash from used in) financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of period Cash and cash equivalents at the end of period $ Question 1 (iii) Reconciliation of profit after tax to net cash flow (used in from operating activities Profit/(loss) after tax Non-cash items: Deferrals/Accruals: Reverse items of income/expense classified as CFIA/CFFA: Net cash flows (used in from operating activities $ Question 1 (iv) Review the SCF's and state three significant concerns. Briefly explain your concerns: 1. Why is this a concern? 2. Why is this a concer? 3. Why is this a concer? Insert your answers from Question 1: Your alternative classification answer: (ii) The indirect method was used: (ii) The indirect method was used: CFOA S CFOA S CFIA CFIA CFFA CFFA (iii) The direct method was used: (iii) The direct method was used: CFOA CFOA CFIA CFIA CFFA CFFA and Reconciliation: and Reconciliation