Condensed financial data of Kings Pty Ltd follows. Assets Cash Accounts receivable Inventory Investments (long term) Plant and equipment Accumulated depreciation Total Assets Liabilities and equity Accounts payable Accrued expenses payable Debentures payable Share capital Retained earnings Total liabilities and equity Sales Gain on sale of equipment Less: Cost of sales Income tax Interest expense Profit Operating expenses, excluding depreciation expense Depreciation expense Additional information: Kings Pty Ltd Statement of financial position as at 30 June 2023 1. 2. 3. 4. 5. 6. 2023 37,500 38,000 45,000 38,000 100,000 38,000 $ 220,500 22,000 14,000 Kings Pty Ltd Statement of profit or loss for the year ended 30 June 2023 20,000 110,000 54,500 $ 220,500 70,000 12,500 36,000 3,000 4,500 Required (a) Prepare a statement of cash flows using the direct method. (b) Prepare a reconciliation of profit to cash provided by operations. 2022 22,500 21,000 54,000 42,000 78,000 30,000 $ 187,500 20,000 8,500 10,000 80,000 69,000 $ 187,500 131,000 5,000 136,000 New equipment and machinery were purchased for cash during the year. Investments were sold at cost. Equipment costing $35,000 was sold for $12,000, resulting in a gain of $5,000. A cash dividend was declared and paid during the year. Shares and debentures are issued at cash. Accounts payable pertain to inventory creditors. 126,000 $ 10,000