The information overleaf relates to Cascade Ltd.

Additional information in relation to the year ended 30 June 2018

(a) A loan payable of $45000 was satisfied by conversion into 45 000 ordinary shares, valued at $1 each.

(b) The sold equipment cost $41000 and had a carrying value of $34 000 when sold. Land with a carrying value of $25000 was sold during the year for $25000.

(c) The company pays tax in four instalments on the normal due dates throughout the year. The first three instalments paid in cash were for $15000, $12 750 and $16 000 respectively.

Required

A. Prepare only the cash flows from operating activities section of Cascade Ltd’s statement of cash flows for the year ended 30 June 2018 in accordance with IAS 7/AASB 107, using the direct method.

B. Reconstruct all journal entries in relation to income tax for the year ended 30 June 2018.

	CAscade LTD Comparative Statements of Financial Position as at 30 June
			2018		2017
	ASSETS Cash at bank Accounts receivable Allowance for doubtful debts Inventory Prepaid insurance Land (at cost) Buildings (at cost) Accumulated depreciation – buildings Equipment (at cost) Accumulated depreciation – equipment		$  52 700 73 500 (7 000) 54 000 5 000 45 000 200 000 (21 000) 193 000  (28 000)		$  57 000 32 000 (6 000) 10 000 7 000 70 000 100 000 (11 000) 68 000 (10 000)
			$567 200		$317 000
	LIABILITIES AND EQUITY Accounts payable Interest payable Other expenses payable Current tax liability Final dividend payable Loan payable Share capital (ordinary shares, issued at $1, fully paid) General reserve Retained earnings		$  75 200 2 000 10 000 11 800 19 800 75 000 220 000 45 000 108 400		$  56 000 — — 15 000 4 800 130 000 60 000 20 000   31 200
			$567 200		$317 000

	CAscade LTD Statement of Profit or Loss and Other Comprehensive Income for the year ended 30 June 2018
	INCOME Sales		$890 000
	EXPENSES Cost of sales Bad debts expense Loss on sale of equipment Depreciation Insurance expense Interest expense Salaries and wages Other expenses	$465 000 10 000 2 000 33 000 2 000 12 000 134 000   42 000	700 000
	Profit before income tax Income tax expense		190 000   65 000
	Profit		$125 000