The financial statements of Triathlon Ltd are provided below and overleaf.

	Triathlon LTD Comparative Statements of Financial Position as at 30 June
		2017	2016	Changes
	CURRENT ASSETS Bank bills (due 31 July) Deposits at call Accounts receivable Allowance for doubtful debts Trade bills receivable Inventory Prepaid expenses	$   15 000 83 000 262 000 (14 500) 15 000 503 000    40 000	$        — 41 000 208 000 (11 500) 12 000 477 600    45 000	$  15 000 42 000 54 000 (3 000) 3 000 25 400    (5 000)
		903 500	772 100	131 400
	NON-CURRENT ASSETS Shares in Tin Ltd Buildings (cost) Accumulated depreciation – buildings Equipment (cost) Accumulated depreciation – equipment Land (cost)	225 000 1 950 000 (505 000) 890 500 (289 500)    500 000	375 000 1350 000 (469 000) 760 500 (348 000)   500 000	(150 000) 600 000 (36 000) 130 000 58 500           0
		2 771 000	2 168 500	602 500
		3 674 500	2 940 600	733 900
	CURRENT LIABILITIES Bank overdraft Accounts payable Trade bills payable Expenses payable Interest payable Dividend payable Current tax liability	63 000 426 500 7 000 33 750 25 000 180 000     77 300	107 000 448 000 9 600 29 500 22 500 195 000    64 500	(44 000) (21 500) (2 600) 4 250 2 500 (15 000)    12 800
		812 550	876 100	(63 550)
	NON-CURRENT LIABILITIES Mortgage loan Debentures	180 000    800 000	100 000    600 000	80 000  200 000
		980 000	700 000	280 000
		1 792 550	1 576 100	216 450
	NET ASSETS	$1 881 950	$1 364 500	$517 450
	EQUITY Share capital Retained earnings	$1 129 500    752 450	$  889 500    475 000	$240 000  277 450
		$1 881 950	$1 364 500	$ 517 450

	triathlon LTD Statement of Profit or Loss and Other Comprehensive Income for the year ended 30 June 2017
	INCOME Sales revenue (net) Dividends received Proceeds from sale of share investment Proceeds from sale of equipment Discount received		$6 580 000 43 000 245 000 94 000      12 750
	Total income					$6 974 750
	EXPENSES Cost of sales Carrying amount of shares sold Carrying amount of equipment sold Depreciation expense – equipment Depreciation expense – buildings Interest expense Bad debts expense Discount allowed Other expenses		3 475 000 150 000 15 000 46 500 36 000 73 000 14 650 5 250 2 411 100			6 226 500
	Profit before income tax Income tax expense					748 250   290 800
	Profit					$  457 450

	triathlon LTD Statement of Changes in Equity for the year ended 30 June 2017
			Share capital	Other reserves	Retained earnings		Total
	Balance at 1/7/16 Total comprehensive income for the period Dividends declared Issue of share capital		$  889 500    240 000		$475 000 457 450 (180 000)		$1 364 500 457 450 (180 000)   240 000
	Balance at 30/6/17		$1 129 500		$ 752 450		$1 881 950

Additional information

During the year ended 30 June 2017, Triathlon Ltd entered into the following transactions relevant to the preparation of the statement of cash flows:

(a) Building additions were completed at a cost of $600000 cash.

(b) New equipment was purchased at a cost of $250000; $150000 was paid in cash and the balance covered by arranging a long-term mortgage loan with Running Finance Ltd.

(c) Equipment with a cost of $120 000 and accumulated depreciation of $105 000 was sold for $94 000 cash.

(d) Shares in Bike Ltd were sold for $245 000 cash.

(e) Debentures (9%) were issued at nominal value for cash, $200 000.

(f)  An additional 40 000 ordinary shares were issued for cash for $6 per share.

(g) A cash dividend of $195 000 was paid during the year.

(h) $20 000 of mortgage due 30 June 2017 was repaid during the year.

(i)  The company pays tax in four instalments, and the first three instalments have been paid in relation to the current year.

(j)  The bank overdraft facility is used as part of the company’s everyday cash management facilities.

Required

A. Prepare a statement of cash flows in accordance with accounting standards using the direct method.

B. Prepare notes to the statement to (1) reconcile cash at end shown in the statement of cash flows to the figures in the statement of financial position and (2) reconcile the net cash from operating activities to profit.

C. Comment on the company’s cash flows during the year ended 30 June 2017 and cash position at 30 June 2017.

D. Discuss whether accounting standards should allow the option to prepare the statement of cash flows using the direct or indirect method.