Question 4 (Total 15 marks) The following comparative statements of financial position and income statement are for the business of Kim Pty Ltd: KIM PTY LTD Balance Shoot as al 30 June 2017 2018 ASSETS Cash at bank $20,000 $30,000 Accounts receivable 74,000 52,000 Inventory 60,000 88,000 Prepaid expenses 44,000 36,000 Property, plant and equipment 600,000 648,000 Accumulated depreciation - property, plant and equipment (180.000 1230.000) 5618.000 5624,000 LIABILITIES AND EQUITY Accounts payable $96.000 $60,000 Expenses payable 22.000 40.000 Current tax liability 50,000 44.000 Share capital 300,000 300.000 Retained earnings 150 000 180 000 $818.000 $624.000 KIM PTY LTD Income Statement for veas ended 30 June 2018 INCOME Sales revenue $800,000 EXPENSES Cost of sales $408,000 Wages and salaries expense 160,000 Depreciation expense-plant and equipment 50,000 Other expenses 78,000 Income tax expense 441000 740.000 PROFIT $60.000 Additional information (a) All sales and purchases of inventory are on credit. (b) Income tax is paid in one instalment during the year. (c) A dividend had been paid to shareholders. (d) Additional plant had been acquired through a cash payment. Required: A. Discuss the purposes of the statement of cash flows. (5 marks) b. Prepare the statement of cash flows for Kim Pty Ltd for the year ended 30 June 2018. Use the direct method. (10 marks)