The following financial statements relate to Henley Ltd.

The following information is also available at 31 December 2015:
* The company purchased £15,000 of property, plant and equipment during 2015.
* During 2015 equipment originally acquired for £5,000 was sold for £12,000. The accumulated depreciation on the equipment was £2,000 at the date of sale.
* Dividends of £6,000 were paid to shareholders on 1 July 2015.
Required

(a) Prepare a statement of cash flows for Henley Ltd for the year ended 31 December 2015 using the direct method.

(b) Prepare a statement of cash flows for Henley Ltd for the year ended 31 December 2015 using the indirect method.

(c) Review the cash flow position of Henley Ltd at 31 December 2015.

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Henley Ltd Statement of comprehensive income for the year ended 31 December 2015 Revenue 120,000 Cost of sales Gross profit (60,000) 60,000 Employee salaries (20,000) Rent (5,600) Lighting and heating (4,000) Profit on disposal of property plant and equipment 9,000 Depreciation on equipment (8,000) Allowance for doubtful receivables (2.000) Operating profit 29,400 Finance costs (1,100) 28,300 Profit before tax Income tax expense Profit for the period (4.500) 23,800