12.6 ABC SpA has the following balance sheets as at 31 December 2003 and 2004, and income statement for 2004 (amounts in euro):

ABC SpA Balance sheet as at 31 December 2004 and 2003 2004 2003 ASSETS PPE, net 1,440,000 880,000 Cash and cash equivalents 176,000 116,000 Trade and other receivables 272,000 152,000 Inventories 256,000 216,000 Prepaid expense 16,000 -0-

Total assets 2,160,000 1,364,000 SHAREHOLDERS’ EQUITY AND LIABILITIES Issued capital 708,000 508,000 Retained earnings 720,000 600,000 Non-current liabilities 500,000 104,000 Trade and other payables 120,000 76,000 Wages payable 12,000 16,000 Tax payable 100,000 60,000 Total shareholders’ equity and liabilities 2,160,000 1,364,000 ABC SpA Income statement for the year ended 31 December 2004 Sales 1,832,000 Cost of sales (752,000)

Gross profit 1,080,000 Operating expenses:

Administrative expenses 493,000 Depreciation 80,000 Wages 287,000

(860,000)

EBIT 220,000 Income taxes (100,000)

EAT 120,000 Calculate the cash flows from operating, investing and financing activities for the year ended 31 December 2004. Use both the direct and indirect methods for reporting cash flows from operating activities.