Duck Pty Ltd

Statement of profit or loss for year ending 30 june 2024

Revenues $900,000

Cost of sales $470,000

Gross Profit $430,000

Operating expenses $280,000

Income from operations before tax $150,000

Income tax expense $47,000

Profit $103,000

Duck Pty Ltd

Statement of financial position as at 30 June 2024

	2024	2023
Accounts receivable	$50,000	$40,000
Inventory	$40,000	$30,000
Accounts payable	$30,000	$41,000
Income tax payable	$6,000	$4,000

Additional information:

Duck Pty Ltd has no depreciable assets and no bad debts written-off during the year

Accounts payable covers all payables including wages payable

Inventory purchases and operating expenses are reflected in accounts payable.

Questions:

1. Prepare the operating activities section of the statement of cash flows using the direct method showing working out.
2. Briefly explain the difference between the direct and indirect methods of preparing the operating activities section of statement of cash flows.