The statements of financial position of Light Limited are as follows: Statement of Financial Position as at 31 December 2019 2020 Cost Dep'n Carrying Cost Depin Carrying amount amount Non-current Assets Property, plant and 6,000 1,200 4,800 9,000 2,600 6,400 equipment Current Assets Inventory 3,500 1.000 Trade receivables 900 1,600 Bank (cash and cash 1,100 3,400 equivalents) 5,500 6,000 Total Assets 10,300 12,400 Current Liabilities Trade payables Tax liability 1,600 2,000 2,800 600 3,400 3,600 Non-Current Liabilities Bank loan 3,000 Equity Share capital 6,000 6.000 Retained earnings 700 Total Equity 6,700 6,000 Total Liabilities and 10,300 12,400 Equity Additional information Additional property, plant and equipment (PPE) was purchased. There were no other revaluations, purchases or disposals of non-current assets. Taxation paid totaled 2,000 Dividends paid totaled 6,000 The income statement for the year ended 31 December 2020 include: Depreciation charges, 1,400 Finance costs, 300 Taxation of 600 You are required to: i. Prepare a statement of cash flows for the year ended 31 December 2020 (20 marks) ii. Describe the importance of cash in businesses. Consider the impacts of businesses having too much or too little cash