Question 1 (Total 20 marks) Ben is the chief accountant of Great Power Ltd, a multi-national company listed on London Stock Exchange. He is asked to prepare a statement of cash flows for the year ended December 31, 2021. The following information is provided: Income Statement 2021 $750,000 Sales Less: Cost of goods sold Salaries and other operating expense Depreciation Loss on disposal of building Profit before tax Less: Income tax expense Net Profit 450,000 156,000 79,000 15,000 50,000 14,000 $36,000 Statements of Financial Position Assets Cash Accounts receivable Inventory Prepaid expenses Buildings (less accumulated depreciation) 2021 $57,000 102,000 165,000 13,000 343.000 $680,000 2020 $30,000 106,000 175,000 7,000 291,000 $609,000 Liabilities & Equity Accounts payable Salaries payable Bonds payable, due March 31, 2028 Sha capital - ordinary Share premium - ordinary Retained earnings 80,000 63,000 98,000 110,000 86,000 243,000 $680,000 75,000 66,000 80,000 95,000 81,000 212,000 $609,000 Additional information 1) All purchases and sales of merchandise inventory are on credit. 2) The accounts payable balances resulted from merchandise inventory purchases. 3) During Year 2021, a building was purchased for cash. Also, a building costing $100,000 was sold for cash when its accumulated depreciation was $60,000 4) Ordinary shares were issued for cash. 5) Bonds were issued for cash. 6) Dividends, to be classified as financing activity, were declared and paid in cash in 2021. 7) The only changes affecting retained earnings are net profit and cash dividends paid. 8) Prepaid Expenses and Salaries Payable relate to Salaries and other operating expense on the income statement. Required: i. Based on the question's information, identify: (a) operating items not generating or using cash in the income statement to be adjusted in the statement of cash flow. (b) nonoperating items in the income statement to be adjusted in the statement of cash flow. (2 marks) ii. Determine cash effects (i.e., increase or decrease in cash flow) of the following items. (a) Payment on purchase of building (item 3]; and (b) Issuance of shares [item 4] (2 marks) iii. Compute the cash flow for each of the following item. Show your calculation process. (a) Receipt from the sales of building (item 3]; and (b) Payment for purchase of building [item 3] (4 marks) iv. Prepare a statement of cash flows for Benin for the year ended December 31, 2021 using the indirect method. (12 marks)