The following are the financial statements of Maya Bhd for the year 2020:

Additional information:

1. Sale of plant and machinery was for cash. There were no purchase of plant and machinery during the year.

2. Land was purchased for cash.

3. Depreciation charged of RM2,000 in the statement of profit or loss comprised depreciation of RM1,000 each for plant and machinery and office equipment.

4. RM10,000 of the convertible debentures were converted into ordinary shares in year 2014.

5. The increase in the issued share capital was due to the issue of shares for cash and the conversion of debentures.

REQUIRED:

a) Describe the importance of Statement of Cash Flows.

b) Prepare the Statement of Cash flows for OKUB for the year ended 30 September 2018 (using indirect method).

RM Maya Bhd Statement of Profit or Loss For the year ended 30 September 2020 RM Sales 220,000 Cost of sales (98,000) Gross profits 122,000 Selling and distribution costs 25,000 Administrative costs 15,000 Depreciation 2,000 Profit on sale of plant (2,000) (40,000) 82,000 Interest expense (6,000) Investment income 1,000 Gain on sale of investment 2,000 Profit before tax 79,000 Tax (22,000) Profit for the year 57,000 Maya Bhd Statements of Financial Position as at 30 September 2020 Year 2020 RM Ordinary shares 140,000 Retained Profit 90,000 Non-current liabilities 10% convertible debentures 50,000 Bank loan 23,000 Year 2019 RM 100,000 50,000 60,000 33,000 Current liabilities Accrued selling expenses Trade payables Tax payable 2,500 12,500 2,000 320,000 1,000 15,000 1,000 260,000 Non-current assets Land Plant and machinery (cost) Accumulated depreciation plant and machinery Office equipment (cost) Accumulated depreciation - office equipment Investments 200,000 30,000 (5,000) 20,000 (3,000) 30,000 140,000 40,000 (6,000) 20,000 (2,000) 40,000 Current assets Inventories Trade receivables Cash in hand 7,000 20,000 21,000 320,000 5,000 17,000 6,000 260,000