You are provided with Cashing Ltds information for the financial year ended 30 June 2021.

1. Information extracted from the Income Statement on 30 June 2021:

$

Sales 6,200,000

Depreciation 425 000

Interest on loan 188 000

Net profit before tax 1 600 000

Net profit after tax 1 120 000

2. 2021 2020

$ $

Fixed Assets (carrying amount) 7, 350,000 6, 931,000

Other Current Assets 610 000 422 000

Inventories 235 000 90 000

Trade and other receivables 262 000 330 000

Corporation tax 14 000 NIL

Cash and cash equivalents 99 000 2 000

TOTAL ASSETS 7 960 000 7 353 000

Ordinary share capital 4 700 000 3 800 000

Retained income 803000 223000

Non-current Liabilities:

Bank borrowigs 2 100 000 2 800 000

Current Liabilities 357 000 530 000

Trade and other payables 132 000 180 000

Corporation tax NIL 28 000

Dividends 225 000 200 000

Bank overdraft NIL- 122 000

TOTAL EQUITY AND LIABILITIES 7 960 000 7 353 000

Events and transactions during 2021.

1. 150, 000 new shares were issued during the year at $8 each.
2. An interim dividend of $270,000 was paid on 1 January 2021.
3. Fixed assets were sold during the year, at a carrying amount of $86,000. Additional equipment was purchased to replace the assets sold.

Required:

1. Prepare the Cash Flow Statement for Cashing Ltd for the year ended 30 June 2021
2. Advice management based on the findings of the cash flow statement.

Show all relevant workings

Hint: For the ordinary share captal in part (C), consider when recociling, the share capital movements of issue of new shars and share backs. By the company.