As at 31 July 2016 and 31 July 2017, Istana Berhad had the following summarised statements of financial position.

Cost	3,284,000			3,091,000
Accumulated Depreciation	(2,198,000)	1,086,000		(2,001,000)	1,090,000
Intangable Cost	9,360,000			8,645,000
Accumulated Amortization	(3,690,000)	5,670,000		(2,715,000)	5,930,000
Investments		2,145,000			127,000
		8,901,000			7,147,000
Inventories	1,112,000			1,086,000
Trade Receivables	948,000			840,000
Prepayments	95,000			108,000
Cash and cash equivalents	489,000	2,644,000		322,000	2,356,000
Total Assets		11,545,000			9,503,000
Ordinary Share Capital @ RM1		1,800,000			1,000,000
Share Premium		1,543,000			1,421,000
Retained Earnings		2,739,000			746,000
Non-current Liabilities		6,082,000			3,167,000
15% Debenture		3,000,000			4,500,000
Trade Payables	1,417,000			896,000
Interest Payable	225,000			337,000
Taxation	641,000			503,000
Dividends Payable Total Equity and liabilities	180,000	2,463,000 11,545,000		100,000	1,836,000 9,503,000

Istana Berhads Statement of Profit of Loss and Other Comprehensive Income for the year ended 31 July 2017 was as follows:

Distribution costs (465,000) Administrative expenses(571,000) Finance charges(563,000) Investment income 78,000= Profit before tax3,420,000- Income tax expense(684,000)= Profit for the period 2,736,000

The following additional information is relevant:

During the year plant and equipment with an original cost of RM1,201,000 and a carrying amount at the date of disposal of RM496,000 was sold at a loss of RM189,000. As at 31 July 2017, RM165,000 of the sale proceeds had yet to be received and is included within trade receivables. As at 31 July 2016 the corresponding figure in respect of disposals made during the year then ended was RM79,000 which was received in full in August 2016. The loss on disposal was charged to cost of sales account.

As in the previous year, all acquisitions of property, plant and equipment made during the year were paid for in cash at the date of acquisition. However, included within trade payables at 31 July 2017 is RM376,000 (2016 Nil) relating to the acquisition of intangible assets. Depreciation and amortization expenses were included in the cost of sales account.

There were no disposals of intangible assets or investments during the year. Trade receivables at 31 July 2017 include RM10,000 (2016 RM8,000) in respect of interest receivable on investments.

As at 31 July 2016 the ordinary share capital of Istana Berhad consisted of 1 million

shares. The following day, the company made a 1 for 2 bonus issues of 500,000 shares by utilizing available profits.

Dividends of RM243,000 were charged to retained earnings in the year ended 31 July 2017.

Required:

1) Using a Direct Method, prepare a Statement of Cash Flows for Istana Berhad for

the year ended 31 July 2017, in accordance with MFRS 107, showing you are calculations.

2) Prepare the statement of reconciliation of profit before tax to cash flows from operations for the year ended 31 July 2017.