QUESTION ONE The balance sheets of Choolwe& Co. Ltd for years ended 2019,2018 and 2021 are as follows: Choolwe & Co Ltd Balance sheets at 31 December 2019 2020 2021 K000 K000 K000 Non-current assets Plant and equipment 13,200 16,110 16,410 Current assets Inventory 2,190 2,280 2,490 Trade debtors 2,040 2,100 2,430 Short-term investments - 4,200 1800 1,160 Cash at bank and in hand 1,920 1,650 2,160 Creditors: amounts falling due within one year Short term loans (2,340) (2,580) (2,550) Trade creditors (2,760) (2,610) (2,670) Taxation (360) (420) (530) Net current assets 5,460 5,610 5,750 Total assets less current liabilities 18,090 18,330 19,000 Capital and reserves Called-up share capital 4,500 4,500 4,500 Share premium account 9,000 9,000 9,000 Other reserves 3,280 4,060 4,570 Income statement 1,310 770 960 Other data Income before tax 960 1,590 1,020 420 Tax on annual profit 360 530 Tax paid during the year 300 360 420 Annual depreciation 645 780 900 Dividends declared and paid 360 360 360 In 2020, equipment was sold at a loss of K210,000. New plant in 2020 cost K5,100,000 and in 2021 cost K1,200,000. Income transferred to other reserves in 2020 and 2021 amounted to K780 and K510 respectively REQUIRED Prepare a statement of cash flows for 2020 and 2021 in accordance with FSR 1 and show how they would be presented under IAS 7. a) State the objective of financial statements. b) Identify and explain briefly the seven (7) c) Explain atleast five (5) qualitative characteristics of financial information