Comparative statements of financial position for Gold Ltd on 30 June 2020 and 2021 are presented overleaf.

Examination of the company’s statement of profit or loss and other comprehensive income and general ledger accounts disclosed the following.

1. Profit (after tax) for the year ending 30 June 2021 was $80 000.

2. Depreciation expense was recorded during the year on buildings, $13 800, and on equipment, $22 900.

3. An extension was added to the building at a cost of $300 000 cash.

4. Long‐term investments with a cost of $90 000 were sold for $125 000.

5. Vacant land next to the company’s factory was purchased for $129 000 with payment consisting of $39 000 cash and a loan payable for $90 000 due on 30 June 2024.

6. Debentures of $100 000 were issued for cash at nominal value.

7. 30 000 shares were issued at $3.80 per share.

8. Equipment was purchased for cash.

9. Net sales for the period were $875 600; cost of sales amounted to $525 300; other expenses (other than depreciation, carrying amount of investments sold, interest, and bad debts written off, $3500) amounted to $149 400.

10. Income tax paid during the year amounted to $73 700, and interest paid on liabilities amounted to $40 000.

Required

(a) Prepare a statement of cash flows for the year ended 30 June 2021 using the direct method, and assuming that bank overdraft is part of the entity’s cash management activities.

(b) Prepare any notes required to be attached to the statement.

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CURRENT ASSETS Cash at bank Accounts receivable Inventory Prepaid expenses GOLD LTD Comparative Statements of Financial Position as at 30 June 2021 2020 $ $ 74 600 127 200 111 300 275 000 221 200 22 800 425 000 23 000 430100 NON-CURRENT ASSETS Buildings Accumulated depreciation - buildings Equipment Accumulated depreciation - equipment Land Long-term investments 639 000 (111400) 361 200 (89 900) 168 000 966 900 70000 $1461 900 339 000 (97 600) 331 200 (67 000) 39 000 544 600 160 000 $1 134 700 CURRENT LIABILITIES Bank overdraft Bills payable (trade) Accounts payable Accrued expenses Current tax liability NON-CURRENT LIABILITIES Loan payable Debentures due 1/9/26 EQUITY Share capital Retained earnings 16700 45 000 170000 10500 26000 268 200 240 000 300 000 540000 $ 808 200 502 100 151 600 $ 653 700 50000 168 000 14000 24 000 256000 150 000 200 000 350 000 $ 606000 388 100 140600 $ 528700