Question 2 Mop Ltd is preparing its Statement of Cash Flows for the year ended 31 December 2020. On 1 July 2020 Mop repaid 10,000 of its 10% loans and replaced this with a new 8% loan. Additionally, some of the 10% loan became repayable within 12 months. Mop sells some goods, which are faulty on the day of delivery to the customer. A provision is made each year for the future costs of rectifying these goods. A number of pieces of equipment with a total carrying value of 28,000 were sold for 16,000 during the year. Depreciation for the year was 9,000. 2019 Mop Ltd - Statements of Financial Position at 31 December... 2020 Non-current Assets Property, Plant & Equipment at cost 200,000 130,000 Current Assets Inventory Trade Receivables Cash and cash equivalents 24,800 16,600 nil 23,600 14,000 11,800 41.400 241,400 49,400 179,400 Total Assets Equity and Liabilities Capital & Reserves Ordinary shares of 1 each Share Premium Retained earnings 84,000 24,000 29.400 137,400 56,000 22,000 20.000 98,000 42,000 10,000 60,000 nil Non-current liabilities 10% Loan notes 8% Loan notes Current liabilities: Trade Payables Provision for faulty goods Bank overdraft 10% Loan notes Current tax payable 29,000 3,000 5.600 8,000 6.400 10,400 2,000 nil nil 9,000 52,000 21.400 Mop Ltd - Statement of Comprehensive Income for year ending 31 December 2020 Revenue 390,000 Cost of sales (310,000) Gross Profit 80,000 Operating costs (55.000) Profit from operations 25,000 Finance costs (5,900) Profit before tax Income tax expense 19,100 (4,000) Profit for the financial year 15,100 Required (a) (b) Prepare Mop's statement of cash flows for the year ended 31 December 2020, in accordance with IAS 7 Statement of cash flows.. (26 marks) Explain the key cause of the fall in cash held by Mop between December 2019 and December 2020. (4 marks) (30 marks)