Reconstructing account balances from a statement of cash flows XYZ LIMITED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2022 Consolidated 2022 2021 Cash flows from operating activities Cash receipts from customers 389 863 188 739 Cash payments to suppliers and employees (375 926) (304 600)

Interest received 1 572 1 368 Interest paid (21 514) (13 245)

Income taxes paid (14 281) (6 514)

Net cash used in operating activities (20 286) (134 252)

Cash flows from investing activities Proceeds from sale of plant and equipment 375 719 Payments for plant and equipment (12 284) (14 545)

Purchase of controlled entity (942) (4 609)

Net cash used in investing activities (12 851) (18 435)

Cash flows from financing activities Proceeds from issue of shares 46 945 5 275 Proceeds from borrowings 112 500 161 387 Repayment of borrowings (100 000) —

Dividends paid (21 656) (18 971)

Net cash provided by financing activities 37 789 147 691 Net increase/(decrease) in cash held 4 652 (4 996)

Cash at the beginning of the financial year 1 943 6 939 Cash at the end of the financial year 6 595 1 943 Additional information:

a Net profit after tax is $25 270, which included a gain on the sale of plant and equipment of $250 (on plant and equipment that cost $2000).

b There was no opening or closing balance in dividends payable.

c Accounts receivable increased by $20 000 during the year.

d Interest payable at 30 June 2022 was $2154, and at 30 June 2021 was $3712.

Required:
1 How much would retained profits have increased or decreased during the year, assuming no transfers to or from reserves?
2 What were the company’s sales for the year?
3 What was the book value of the plant and equipment sold?
4 What was the interest expense for the year?
5 Based only on the information given in the question, list two reasons why net profit would be higher than cash flow from operations.