Croft Ltd. Excerpt from the statement of comprehensive income For the year ended April 30, 20X2 Revenue Cost of goods sold Gross profit Distribution costs Administrative expenses Operating income Finance costs Net income $4,200,000 (2.870,000) 1.330,000 (280,000) (473,000) 577.000 (23.000) $554,000 Croft Ltd. Excerpt from the statement of financial position As at April 30 20X2 20X1 Current assets Cash and cash equivalents Accounts receivable Inventory Current liabilities Accounts payable Accrued liabilities 71.000 416.000 318,000 25.000 389.000 292.000 373,000 45,000 320,000 71,000 O UDHU Accounts payable Accrued liabilities 373,000 45.000 320,000 71,000 Notes: 1. Operating income includes a gain of $7,000 on the disposal of machinery and $12,000 amortization of a government grant. These were deducted in arriving at administrative expenses. 2. Cost of goods sold includes depreciation of $215,000. 3. Cost of goods sold, distribution costs and administrative expenses include wage and salaries costs, all of which were paid by year end. 4. Administrative expenses include a $17,000 bad debt written off in the year. 5. Assume finance costs are reported as financing activities and no interest was paid in cash during the year. 5. Assume finance costs are reported as financing activities and no interest was paid in cash during the year. Required: Prepare the cash generated from the operations section of the statement of cash flows using: a) The direct method - 5 marks b) The indirect method - 10 marks