Following are extracts from the accounting records of Union Ltd at 30 June 2020:

Other information:

• Plant with a carrying value of $nil (cost of $40,000; accumulated depreciation of $40,000) is scrapped during the year.

• Assume there are no income taxes and dividend payments during the year.

• Wages and salaries are paid by cash.

REQUIRED

Prepare a cash flow statement for Union Ltd for the year ending 30 June 2020 using the direct method. Notes are not required.

Union Ltd 2019 2020 ($000) ($000) Items from balance sheet as at 30 June 2020 Assets Cash 550 655 Account receivable 220 300 Allowance for doubtful debts (15) (30) Inventory 450 500 Land 200 200 250 300 Plant and equip Accumulated depreciation - plant and equip. (120) (130) Total Assets 1,535 1,795 Liabilities 300 320 Accounts payable Interest payable Borrowings 35 20 330 400 450 450 Equity Share capital Retained earnings Total liabilities and equity 420 605 1,535 1,795 Items from income statement for the period ending 30 June 2020 ($000) Sales (all on credit) 500 Cost of sales (150) Doubtful debt expenses (80) Wages and salaries (10) Depreciation expense (50) Interest expense (25) Net Profit 185