QUESTION 3 Diamond Bhd closes its accounts on 31 March every year. The following were the company's Statement of Financial Position as at 31 March 2019 and 2018. DIAMOND BHD Statement of Financial Position as at 31 March EQUITY AND RESERVES Ordinary Shares at RM2.00 each General Reserve Asset Revaluation Reserve 2019 RM 21,600,000 250,000 500,000 2018 RM 19,600,000 2,250,000 Retained Profits 664,000 531,500 NON-CURRENT LIABILITIES 7% CILB Loan 430,000 800,000 67,800 CURRENT LIABILITIES Trade payables Bank overdraft Accrued 7% CIMB Loan interest Tax payable 36,000 475,000 24,500 10,000 23,727,000 23,511,800 NON-CURRENT ASSETS Properties at carrying value Plant at carrying value Equipment at carrying value Investments at cost Intangible assets 9,619,500 6,750,000 4,705,000 500,000 200,000 9,119,500 7,500,000 5,600,000 1,000,000 285,000 CURRENT ASSETS Inventory Short term investments Trade receivables Tax recoverable Bank 102,500 75,000 45,000 163, 100 75,000 74,150 14,000 1,411,050 23,511,800 23,727,000 Additional information: 1. 2. The short-term investments qualify as cash equivalents. The changes in property, plant and equipment were due to the followings: i. Some properties were revalued during the year. ii. Depreciation expenses charged for the year were as follows: RM750,000 for plant and RM520,000 for equipment. One of the equipment was sold for RM300,000; there was no new purchase of property, plant and equipment during the year. iv. Some of the investments were disposed for a total gain of RM120,000. There was no purchase or disposal of intangible assets during the year. The intangible was duly amortized. No dividend was paid during the year. Instead share dividend was given to the shareholders out of the general reserve. No new shares were issued. During the year, the total dividend received amounting to RM180,500. V. 3. 4. 5. The taxation expense for the year was RM187,500 and total interest expense was RM56,000. Required: a. Prepare the Statement of Cash Flow for Diamond Bhd for the year ended 31 March 2019 using the indirect approach. (Show the note for the schedule of cash and cash equivalent). (15 marks) b. Briefly explain the positive and negative net cash flow indication to investors by using the cash flow from operating activities as an example. (5 marks) (Total: 20 marks)