The financial statements for the business of Jet’s Ski Equipment are shown below.

Additional information 

1. All purchases and sales of inventories are on credit.

2. On 1 July 2019, J. Waters injected a further capital contribution of $21 000 cash into the business.

3. During the year, store equipment costing $18 000 with a carrying amount of $15 000 was sold for $6000 cash.

4. Half the land on hand at the beginning of the year was sold for $48 000 cash.

5. During the year, the owner withdrew $6000 from the business bank account in order to pay his personal income tax bill and $300 per week for 50 weeks for private consumption.

Required

(a) Prepare the statement of cash flows for Jet’s Ski Equipment for the year ended 30 June 2020, using the direct method.

(b) Comment on the cash flow position as shown in the entity’s statement of cash flows.

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ASSETS JET'S SKI EQUIPMENT Comparative Statements of Financial Position as at 30 June Cash at bank Accounts receivable Inventory Store equipment Land Buildings Accumulated depreciation store equipment Accumulated depreciation - buildings LIABILITIES AND EQUITY Accounts payable Bank overdraft J. Waters, Capital 2019 2020 $ 27000 $ 42,000 51 000 144 000 168 000 90 000 108 000 (27 000) (45 000) 120000 60 000 180 000 (9 000) $540,000 72000 30 000 438 000 $540000 180 000 (15000) $534,000 78 000 456 000 $534 000