the following informational was extracted from the financial records of Lucy LTD

additional information

1. The entity classifies dividends paid and interest paid as cash flows from financing activities
2. an item of equipment was sold for $2000 cash

required:

(i) reconstruct and prepare general ledger accounts (for accounts recievable, allowance for doubtful debt, GST payable/recievable, inventory, plant and equipmant, accumulated depreciation, accounts payable, interest expense payable, dividends payable, income tax payable) and journal entries (for accounts recievable, accumulated depreication and accounts payable

(ii) prepare statement of cash flows for Lucy LTD in accordance with NZ IAS & statement of cash flows, for the year ended 31 march 2021, using the indirect method and direct method for each

(iii) Lucy LTD classified interest expense paid, and dividends paid as cash flows from financing activities. What if Lucy LTD used the alternative classification for these two items?

Complete the table below to illustrate the effect of using a different classification, for these 2 items, on the statement of cash flows and note.

original classification

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 $1 500 6 345 320 7 000 20 Dr 55 025 16 000 900 7492 10 150 200 3 000 15 000 26 818 31 March 2020 $275 5 600 290 7 240 81 Cr 50 000 13 500 200 5 396 15 70 30 9 000 34 533 $70 000 48 000 24 690 310 165 3 200 500 400 original classification Insert your answers from Question 1: Your alternative classification answer: (ii) The indirect method was used: (ii) The indirect method was used: CFOA $ CFOA $ CFIA CFIA CFFA CFFA (iii) The direct method was used: (iii) The direct method was used: CFOA CFOA CFIA CFIA CFFA CFFA and Reconciliation: and Reconciliation: 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 $1 500 6 345 320 7 000 20 Dr 55 025 16 000 900 7492 10 150 200 3 000 15 000 26 818 31 March 2020 $275 5 600 290 7 240 81 Cr 50 000 13 500 200 5 396 15 70 30 9 000 34 533 $70 000 48 000 24 690 310 165 3 200 500 400 original classification Insert your answers from Question 1: Your alternative classification answer: (ii) The indirect method was used: (ii) The indirect method was used: CFOA $ CFOA $ CFIA CFIA CFFA CFFA (iii) The direct method was used: (iii) The direct method was used: CFOA CFOA CFIA CFIA CFFA CFFA and Reconciliation: and Reconciliation