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The following information has been extracted from the financial records of Nocturnes Ltd: Cash Accounts receivable Allowance for DD Inventory Plant and equipment - at cost Accumulated Depreciation Bank overdraft Accounts payable GST payable Interest expense payable Dividends payable Income tax payable Long-term borrowings Share capital Retained earnings 31/3/2022 $500 5241 250 7 000 45 025 16 000 110 6 342 50 10 150 40 4 000 11 864 18 950 31/3/2021 $275 5452 300 7 240 44 000 13 500 200 7 992 381 15 30 3 000 9 799 21 750 Sales Cost of goods sold Operating expenses Bad debt expense Doubtful debt expense Interest expense Depreciation expense Loss on sale of plant and equipment Tax expense 70 000 40 000 14 591 150 239 205 3 300 501 4 000 Additional information: 1. Nocturnes Ltd uses the indirect method to report cash flows from operating activities. 2. The entity classifies both dividends paid and interest paid as operating cash flows. 3. An item of plant and equipment was sold for 52 000 during the year. 4. An item of plant and equipment was purchased for $628 with an issue of shares. 5. The GST rate is 15%. Required: 1) Reconstruct all the general ledger accounts provided in the answer booklet. (11) Prepare a Statement of Cash Flows for Nocturnes Ltd, in accordance with NZ IAS 7 Statement of Cash Flows, for the year ended 31 March 2022. (111) Prepare a Statement of Cash Flows for Nocturnes Ltd, in accordance with NZ IAS 7 Statement of Cash Flows, for the year ended 31 March 2022. Assume this time that Nocturnes Ltd uses the direct method to report cash flows from operating activities. The reconciliation note, as per FRS-44 NZ. is required. Assume this time that the entity classifies both dividends paid and interest paid as financing cash flows. (iv) Explain why there is a difference in the dollar amount for Net cash flow (used in) from operating activities in (11) and (111) above. Comment on the 'cash generated from operations amount in your answer. QUESTION 3 (i) General ledger accounts Dividends payable $ $ Retained earnings $ S Dividends declared $ $ Interest expense payable $ S Income tax payable $ $ Plant and Equipment $ $ Accumulated depreciation $ S Prepare the journal entry to record the sale of equipment: Dr Cr Share Capital $ $ Long-term borrowings $ S Net of GST GST Accounts receivable SGST inclusive Net of GST GST SGST inclusive Prepare the journal entry to record the credit sales: DI Cr Allowance for DD $ S Prepare the journal entry for the reduction of the Allowance for DD: Dr Cr Inventory $ S Net of GST GST Accounts payable SGST inclusive Net of GST GST SGST inclusive Prepare the journal entry to record the credit purchase of inventory: Dr Cr GST payable $ $ QUESTION 3 (ii) Nocturnes Ltd Statement of Cash Flows for the year ended 31 March 2022 Cash flows from operating activities: Start with? $ Transactions of a non-cash nature Deferrals/accruals of past or future operating cash receipts/payments: Reverse items of income/expense included in profit but are CFFA/CFIA Reverse items of expense/income included in profit to be shown sep as CFOA Cash generated from operations Net cash (used) from operating activities Cash flows from investing activities: Net cash flow (used in)/from investing activities Cash flows from financing activities Net cash flow (used in) from financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Check: QUESTION 3 (iii) Nocturnes Ltd Statement of Cash Flows for the year ended 31 March 2022 Cash flows from operating activities: Cash generated from operations Net cash flow (used in) from operating activities Cash flows from investing activities: Net cash flow (used in)/from investing activities Cash flows from financing activities Net cash flow (used in) from financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Check: Nocturne Ltd Reconciliation of profit after tax to net cash flows from operating activities Start with ? $ Transactions of a non-cash nature: Deferrals/accruals of past or future operating cash receipts/payments: Reverse items of income/expense included in profit but are CFIA/CFFA: Net cash flow (used in)/from operating activities (iv) Explain why there is a difference in the dollar amount for Net cash flow (used in) from operating activities in (ii) and (iii) above. Comment on the cash generated from operations' amount in your