Henry & Henry are a partnership providing legal services in South-East Queensland.

It has been noted that from financial information received there are missing files for accounts receivable (debtors) receipts and accounts records for payments to accounts payable (creditors). The client has confirmed that the records are missing from their end.

Henry & Henry have requested our services to prepare and produce annual cash flow statements in accordance with AASB 107 Statement of Cash Flows. Henry & Henry have to demonstrate (to their external stakeholders) their ability to meet their cash flow requirements. IGNORE GST FOR THIS TASK.

Summary of transactions of Henry & Henry is provided for the year ended 30 June 2021
Credit sales of legal services	252,000
Credit purchases	191,000
Cash sales of legal services	293,000
Cash purchases	138,000
Discounts allowed	3,000
Discounts received	3,000
Accounts receivable balance 01/07/20	50,400
Accounts receivable balance 30/06/21	61,400
Accounts payable balance 01/07/20	35,850
Accounts payable balance 30/06/21	40,850
Bad debts written off	2,000
Increase in allowance for Doubtful Debts	2,000
Repayment of bank loan	18,000
Drawings by Partners	15,000
Purchase of new Fittings	25,000
Alterations to buildings	4,000
Depreciation of plant	34,000
Cash expenses paid	105,000
Net profit for the year	73,000
Cash at bank 01/07/20	75,000
Cash at bank 30/6/21	116,000

Prepare a Reconciliation of Net Profit with Net Cash Flows from Operating Activities.

Reconciliation of net profit with cash flows from operation activities
			$	$
Net profit
Add Non-cash items in the income statement
Changes in Current Assets and Current Liabilities
Cash flow from operating activities