Question 2 The comparative statements of financial position for the years 2019 and 2020 and a summarised income statement for the year ended 30 June 2020 are shown below (Ignore GST and Tax): 2020($'000) FANTASTIC LTD Comparative Statements of Financial Position as at 30 June 2019 ($'000) Assets Cash Accounts receivable 4 290 Inventory 6 000 Prepaid rent 300 Equipment 19 200 Accumulated depreciation - equipment (6 000) Land 20 400 Motor vehicles 14 550 Accumulated depreciation - motor vehicles (5 490) Total assets 53 250 Liabilities Bank overdraft 300 Accounts payable 6 150 Long-term mortgage 14 100 Total liabilities 20 550 Net assets 32 700 Equity Share capital 26 700 Retained earnings 6 000 Total equity 32 700 1 540 3 150 6 600 360 25 500 (7 500) 24 000 15 600 (6 300 62 950 7 950 18 900 26 850 36 100 26 700 9 400 36 100 FANTASTIC LTD Income Statement for the year ended 30 June 2020 ($'000) Sales (on credit) Less: Cost of goods sold Gross profit Less: expenses (including depreciation) 17 800 5 100 12 700 8 610 1.000 D. 490) 53 250 (6 300) 62 950 Accumulated depreciation - motor vehicles Total assets Liabilities Bank overdraft Accounts payable Long-term mortgage Total liabilities Net assets Equity Share capital Retained earnings Total equity 300 6 150 14 100 20 550 32 700 7950 18 900 26 850 36 100 26 700 6 000 32 700 26 700 9 400 36 100 FANTASTIC LTD Income Statement for the year ended 30 June 2020 ($'000) Sales (on credit) Less: Cost of goods sold Gross profit Less: expenses (including depreciation) Profit 17 800 5 100 12 700 8 610 4.090 Additional information: Rent expense for the year ended 30 June 2020 is nil. All other expenses were paid in cash (excluding depreciation). The company declared and paid cash dividend. The bank overdraft was part of the entity's everyday cash management activities. Required Prepare a statement of cash flows using the direct method for the year ended 30 June 2020. 2