The following statements have been prepared for the company Arrows Ltd for the year ending 30 June 2021. Current assets Cash at bank Accounts receivable Inventory Prepaid operating expenses Total current assets Non-current assets Plant & equipment Accum. Deprec. - plant & equipment Land Total non-current assets Total assets Current liabilities Accounts payable Accrued expenses Provision for tax Total current liabilities Non-current liabilities Long term loan Total non-current liabilities Total liabilities Net assets Balance Sheet of Arrows Ltd As of 30 June 2021 Shareholders' equity Share capital Retained profits Total shareholders' equity 2021 67 912 15 363 32 560 6 150 121.985 177.600 (45 790) 320 500 452 310 574 295 59 500 200 35 28 560 123 260 300 500 300 500 483 760 $150 535 80 000 70 535 $150 535 2020 27 202 25 645 35 230 4 250 92 327 102 850 (33 520) 220 000 289 330 381.657 63 500 21 500 15 200 100 200 186 400 186 400 286 600 $95 057 70 000 25 057 $102 057 Sales Less Cost of goods sold Gross profit Less other expenses Administration expense Salary expense Depreciation expense Interest expense Loss on sale of plant and equipment Total expenses Profit before tax Less Income tax expense Profit after tax Statement of Changes in Equity Shareholders' Equity at 01/07/20 Net profit Dividends declared and paid Shareholders' Equity at 30/06/21 Additional information 1 11 Income Statement of Arrows Ltd for the year ended 30 June 2021 iv V a. 402 410 200 820 201 590 The following took place during the year ended 30 June 2021: A dividend of $37 550 was declared and paid. Plant and equipment was purchased for cash. In addition, plant and equipment with a cost of $55 000 was sold for cash during the year. b. 18 250 26 400 33 100 4 512 3 100 85 362 116 228 (33 200) $83 028 A loan of $140,000 was taken out in July 2020 and some of the other loan was repaid during the year. There were no other borrowings apart from this loan. Land was sold for cash and some land was purchased for $254 000 cash. There were no other issues of shares for cash. Required: 95 057 83 028 (37 550) $150 353 Complete a cash flow statement for the year ended 30 June 2021. Comment on Arrows's cash flow statement whether the business maintains a strong cash flows management in operating, investing and financing activities? Suggest any improvement that is necessary for a sustainable cash flow management. 20