Question 1 The financial statements of Snape Ltd at the year ending 31 December 2021 were as follows. Statement of financial position at 31 December 2021 2020 2021 m m m m Non-current assets Land and Buildings 20.0 20.0 Property, plant and equipment 16.0 21.0 36.0 41.0 Current assets Inventories 8.7 12.0 Receivables 1.8 3.2 Cash 1.0 0 11.5 15.2 Current liabilities Trade payables -15.2 -13.3 Bank overdraft 0 -8.5 Accrual on interest -0.5 Tax -0.7 -0.0 -16.0 -22.3 Non-current liabilities Long term bank loan -7.0 -10.0 24.5 23.9 Equity 1 ordinary shares 20.0 20.0 Share premium 0 0 Reserves 4.5 3.9 24.5 23.9 -0.1 Profit or Loss (extracts) 2020 m 2021 m 3.8 Operating profit Interest receivable Interest payable Profit/Loss before tax Tax Profit/loss after tax Dividends Retained profit/loss 0 -1.0 2.8 -0.9 1.9 -1.3 0.6 1.1 0 -1.5 -0.4 -0.0 -0.4 -0.2 -0.6 (1) Machinery with a net book value of 3,000,000 was sold at the beginning of 2021 for 3,000,000 (2) Snape Ltd purchased 10m of new machinery in September 2021. (3) A dividend of 1m has been declared and paid in 2021. Required: (a) Prepare a statement of cash flows for the year ended 31 December 2021. (70 marks) (b) Using the statement of cash flows prepared in respect of (a) above, prepare briefing notes explaining why cash has decreased at Snape Ltd. Limit of 150 words (15 marks) c) Identify and discuss the key problems that face the company. Limit of 150 words (15 marks) Total (100 marks)