The following information is given for M. Kelley M. Kelley Statements of Financial Position as at 31 May 2019 Cost Acc. Dep" NBV** Cost 2020 Acc. Dep"| NBV** Non-current assets Land and Building 200,000 (1,600) 198,400 200,000 (3,200) 196,800 Equipment 80,800 (49,200) 31,600 117,000 (68,200) 48,800 Motor vehicles 56.600 (18.400 38,200 337,400 (69,200) 268,200 317,000 (71,400) 245,600 Current assets Inventory 81,900 89,200 Accounts receivables 44,200 41,000 Less Allowance for bad and doubtful debts (1800) (2.400 42.400 38,600 Bank 26,700 50,600 Cash 0 49.000 151,000 227,400 Current Liabilities Accounts payable Working Capital I (28.600) (35,000 122.400 390,600 192.400 438,000 Non-current liabilities 4% Loan (repayable 2024) Net Assets (40,000) 350.600 (25.000) 413.000 Financed by: Capital New Capital introduced by cash Add: Net profit 131,200 200,000 83.400 414,600 (64,000) 350.600 350,600 44,000 94.400 489,000 (76.000) 413.000 Less: Drawings Closing capital "Acc. Dep. means Accumulated Depreciation **NBV means Net Book Value PLEASE TURN OVER M. Kelley Income Statement (extract) for the year ended 31 May 2020 Gross profit Add Discount received Add Rent received Total Income 301 060 2.000 8.000 311,060 Less: Expenses Other operating expenses Depreciation Building Depreciation Equipment Loss on sale of motor vehicles Increase in allowance (provision) for bad and doubtful debts Interest expense paid Net profit 182 260 1600 19,000 12,200 600 1.000 (216 660) 94,400 Notes: Motor vehicles were sold for 26,000 Equipment was bought during the year Required: a) Prepare a Statement of Cash Flows for the year ended 31 May 2020 I (20 marks) b) Provide three (3) reasons why Cash Flow Statements are important (3 marks) PLEASE TURN OVER