Question 2 Shown below are the statements of financial position of Folk Lid for the past two years and the company's most recent statement of profit or loss: Statement of Profit or Loss for the year to 31 October 2020 000 Revenue 33,600 Cost of Sales (18.480 Gross profit 15,120 Gain on disposal of property plant and equipment 336 Distribution costs (7,056) Administrative expenses (3,360) Finance costs - interest on loans (136.50) Profit before tax 4,903.50 Tax expense (2016) Profit for the year 2 887.50 000 2019 000 36,150 3,696 3,696 193.50 7.585,50 43.735.50 Statements of Financial Position at 31 October 2020 000 000 Assets Non-current assets Property, plant and equipment at cost 37,756.50 Current Assets Inventories 5,544 Trade and other receivables 5,040 Cash and cash equivalents 10,584 Total assets 48.340.50 Equity Share capital 3,300 Share premium account 1,200 Retained earnings 37,485 41,985 Liabilities Non-current liabilities Bank loans 1,950 Current liabilities Trade and other payables 1,848 Current tax liability 2,016 Bank overdraft 541.50 4.405,50 Total equity and liabilities 48.340.50 3,000 750 34.597 50 38,347.50 1.200 2,772 1,416 4.188 43.735.50 Question 2 continues on the next page Question 2 continued The following information is also available: 1) The total depreciation charge for the year was 5,317,500. 2) Property, plant and equipment costing 1,464,000 with accumulated depreciation of 532,500 was sold during the year at a profit of 336,000. 3) All sales and purchases were on credit. Other expenses were paid for in cash. 4) No dividends were paid during the year. Required: a) Prepare a statement of cash flows for Folk Ltd for the year to 31 October 2020 in accordance with the requirements of accounting standard IAS7 and using the indirect method