Below are the statements of financial position of Lodh Ltd as at 30 June 2020 and 2021, and its statement of profit or loss and statement of changes in equity for the year ended 30 June 2021:

	Lodh LTD Statements of Financial Position as at 30 June
		2021				2020
	Assets Cash at bank Accounts receivable Inventory Prepaid insurance Land Machinery Accumulated depreciation: machinery Total assets	$ $	23 000 39 500 76 000 3 500 39 000 360 000 (81 000 460 000	)		$ $	6 500 37 500 66 000 3 600 44 700 300 000 (67 000 391 300	)
	Liabilities Accounts payable Interest payable Other accrued expenses Long-term borrowings Equity Share capital Retained earnings Total liabilities and equity	$ $	25 000 3 000 7 000 145 000 170 000 110 000 460 000			$ $	28 000 3 500 4 400 117 000 100 000 141 400 391 300

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	Lodh LTD Statement of Profit or Loss for the year ended 30 June 2021
	Income Sales Lease income received Gain on the sale of machinery Less: Expenses Cost of sales Interest expense Loss on the sale of land B Depreciation expense Insurance expense Other operating expenses Profit for the year	$ $	425 000 7 500 8 000 280 000 11 500 9 000 24 000 3 500 81 500		$ $	440 500 409 500 31 000

	Lodh LTD Statement of Changes in Equity for the year ended 30 June 2021
		Share capital		Other reserves		Retained earnings					Total
	Balance at 1/7/20 Profit the period Dividends paid Issue of share capital Balance at 30/6/21	$100 000 70 000 $170 000				$ $	141 400 41 000 (72 400) 110 000			$ $	241 400 41 000 (72 400) 70 000 280 000

Additional information

(a) Land with an original cost of $44 800 was sold for cash of $37 800 during the year.

(b) Machinery with a carrying amount of $25 000 (cost $33 000 and accumulated depreciation $8000) was sold for cash of $34 000.

(c) Lease income is earned from leasing part of the land holdings that are in excess to operating needs.

Required:

1. Prepare a note disclosure to reconcile the net cash flows from operating activities with the profit for the year using indirect method. (7 marks)
2. Prepare the statement of cash flows of Lodh Ltd for the year ended 30 June 2017 based on the direct method of presentation. (3 marks)