QUESTION 4 Extract from Financial Statements for year ended 30 June 2021 Set out below is the draft Statement of Cash flows and associated notes for Rundle Ltd for the year ended 30 June 2021. 2020 $000 2019 $000 5 900 $000 6 750 175 2 363 330 50 2 065 300 30 7 300 (3 013) (2 000) (512) 1 776 Sales Revenue Profit on Sale of Equipment Cost of Goods Sold Depreciation expense Goodwill impairment Other operating expenses (cash payment) Net Profit before Tax Income Tax Expense Net Profit after Tax 2 000 2 183 655 1 528 1 800 1 705 512 1 194 Consolidated Statement of Cash Flows for year ended 30 June 2021 Note Cash flows from operating activities Cash receipts from customers Cash payments to suppliers Cash payments for other operating expenses Income tax paid Cash provided by operating activities 1 Cash flows from investing activities Proceeds from sale of plant and equipment Cash purchases of property, plant and equipment Cash used to acquire subsidiary 2 Cash used by investing activities Cash flows from financing activities Proceeds from share issue Dividends paid Cash used by financing activities Net increase / (decrease) in cash and cash equivalents Cash and cash equivalents at 1 July 2020 Cash and cash equivalents at 30 June 2021 200 (450) (900) (1,150) Cash Inventory Accounts Receivable Accounts Payable Income Tax Payable 1 600 1 150 975 950 655 624 900 650 750 512 600 (250) 350 Required a. 976 624 1,600 Using the information provided, reconstruct the ledger accounts for accounts receivable and accounts payable (including inventory). [6 marks] b. Complete Note 1: Reconciliation of Profit to Cash Flow from operating activities for Rundle Ltd as required by AASB 1054.16. Show all calculations. [4 marks) Explain how the note you have prepared for Rundle Ltd in part (b) assists users to interpret the financial statement. (5 marks] [Question 4 = 15 marks] Note 2: Subsidiary acquired (extract only) During the year Rundle Ltd acquired 60% of the issued shares of Stanley Ltd. Details of the acquisition are as follows: $000 Fair value of identifiable net assets acquired Cash and cash equivalents 900 Trade receivables 875 Property, plant and equipment 1 500 Trade and other payables (600) 2 675