the following information has been extracted from the financial records of Lucy LTD:

Additional information:

1. Lucy Ltd uses the indirect method for reporting cash flows from operating activities.

2. The entity classifies dividends paid and interest paid as cash flows from financing activities.

3. An item of equipment was sold for $2,000 cash.

Required:

(i) Reconstruct the Lucy Ltd general ledger accounts and journal entries provided below.

(ii) Prepare the Statement of Cash Flows for Lucy Ltd, for the year ended 31 March 2021.

(iii) Prepare the Statement of Cash Flows for Lucy Ltd, in accordance with NZ IAS 7 Statement of Cash Flows, for the year ended 31 March 2021 but assume Lucy Ltd uses the direct method for reporting cash flows from operating activities.

As at: Cash Accounts receivable Allowance for DD Inventory GST receivable/payable Plant and equipment - at cost Accumulated Depreciation Bank overdraft Accounts payable Interest expense payable Dividends payable Income tax payable Long-term borrowings Share capital Retained earnings For the year ended 31 March 2021: Sales Cost of goods sold Operating expenses Doubtful debts expense Interest expense Depreciation expense Loss on sale of plant and equipment Tax expense 31 March 2021 31 March 2020 $1 500 $275 6 345 5 600 320 290 7 000 7 240 20 Dr 81 Cr 55 025 50 000 16 000 13 500 900 200 7 492 5 396 10 15 150 70 200 30 3 000 15 000 9 000 26 818 34 533 $70 000 48 000 24 690 310 165 3 200 500 400 Accounts receivable GST GST inclusive GST exclusive GST inclusive ** * * The journal entry would have been: **The journal entry would have been: Allowance for DD GST payable/receivable Inventory Plant and Equipment # AD # The journal entry would have been: Accounts payable GST GST exclusive GST inclusive GST inclusive *The journal entry would have been: Interest expense payable Dividends payable Income tax payable LTB Share capital Retained earnings As at: Cash Accounts receivable Allowance for DD Inventory GST receivable/payable Plant and equipment - at cost Accumulated Depreciation Bank overdraft Accounts payable Interest expense payable Dividends payable Income tax payable Long-term borrowings Share capital Retained earnings For the year ended 31 March 2021: Sales Cost of goods sold Operating expenses Doubtful debts expense Interest expense Depreciation expense Loss on sale of plant and equipment Tax expense 31 March 2021 31 March 2020 $1 500 $275 6 345 5 600 320 290 7 000 7 240 20 Dr 81 Cr 55 025 50 000 16 000 13 500 900 200 7 492 5 396 10 15 150 70 200 30 3 000 15 000 9 000 26 818 34 533 $70 000 48 000 24 690 310 165 3 200 500 400 Accounts receivable GST GST inclusive GST exclusive GST inclusive ** * * The journal entry would have been: **The journal entry would have been: Allowance for DD GST payable/receivable Inventory Plant and Equipment # AD # The journal entry would have been: Accounts payable GST GST exclusive GST inclusive GST inclusive *The journal entry would have been: Interest expense payable Dividends payable Income tax payable LTB Share capital Retained earnings