The following is the Statement of Profit or Loss and the Statements of Financial Position for Nachos Bhd (NB) for the year 2019: Nachos Bhd Statement of Profit or Loss For the year ended 30 September 2019 RM 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 Nachos Bhd Statements of Financial Position as at 30 September Year 2019 Year 2018 RM RM Ordinary shares of RM1 each 130,000 100,000 Share premium 10,000 Retained Profit 90,000 50,000 Non-current liabilities 10% convertible debentures 50,000 60,000 Bank loan 23,000 33,000 Current liabilities Accrued selling expenses 2,500 1,000 Trade payables 12,500 15,000 Tax payable 2,000 1,000 320,000 260,000 __________________________________________________________________________________ ACCT2122/March2020 Page 5 of 7 Non-current assets Land 200,000 140,000 Plant and machinery (cost) 30,000 40,000 Accumulated depreciation plant and machinery (5,000) (6,000) Office equipment (cost) 20,000 20,000 Accumulated depreciation - office equipment (3,000) (2,000) Investments 30,000 40,000 Current assets Inventories 7,000 5,000 Trade receivables 20,000 17,000 Cash in hand 21,000 6,000 320,000 260,000 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 2015. 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. (4 marks) (CLO3:PLO3:C2) b) Prepare the Statement of Cash flows for OKUB for the year ended 30 September 2019 (using indirect method). (21 marks)