Q2 The following information is available for the Syarikat D'NAS Sdn. Bhd: Syarikat D'NAS Sdn.Bhd Balance Sheets As At December 31 2007 (RM) 2006 (RM) Item Assets: Cash Accounts receivable Merchandise inventory Long-term investments Equipment Accumulated depreciation Total assets 24,640 32,180 73,125 55,900 175,500 (33,550) 327.795 23,040 29,400 61,710 56,400 145,500 (31,200) 284,850 Liabilities: Accounts payable Income taxes payable Bonds payable Total liabilities 65,000 10,725 48,750 124,475 40,380 10,200 66,000 116,580 Equity: Common stock Contributed capital in excess of par Retained earnings Total equity Total liabilities and equity 117.000 13,000 73.320 203,320 327,795 96.000 9,000 63,270 168,270 284,850 (RM) 240,000 D'NAS Corporation Income Statement For Year Ended December 31, 2007 Item (RM) Sales Cost of goods sold 80,900 Depreciation expense 29,400 Other operating expenses 48,000 Interest expense 2.000 Other gains (losses): Loss on sale of equipment Income before taxes Income taxes expense Net income (160,300) (8.400) 71,300 27,650 43.650 Additional information: (1) (2) (3) There was no gain or loss on the sales of the long-term investments, nor on the bonds retired. Old equipment with an original cost of RM 37,550 was sold for RM 2,100 cash. New equipment was purchased for RM 67,550 cash. Cash dividends of RM 33,600 were paid. Additional shares of stock were issued for cash. Prepare a complete statement of cash flows for calendar-year 2007 using the indirect method (24 marks) (5) (a) (b) Explain the THREE(3) purposes of the cash flow statement. (6 marks)