Honeymoon Haven Ltd is due to commence preparation of the Cash Flow Statement at the end of 2010. The accountant has called in sick and the statement needs to be prepared by the end of the day. Consequently you, as managing director of the company are now required to complete this task, and have been given the following data:

Summarised Balance Sheet as at 31 December 2010	2010	2009
Cash	106,800	168,210
Accounts Receivable	138,840	133,500
Inventory	213,600	202,920
Property, plant & equipment (net)	341,760	357,780
Total Assets	801,000	862,410
Accounts Payable	128,160	144,180
Wages Payable	2,670	8,010
Mortgage Payable	186,900	229,620
Share Capital	347,100	347,100
Retained Profits	136,170	133,500
Total Liabilities and Owners Equity	801,000	862,410

Summarised Income Statement for the year ended 31 December 2010	2010
Sales	480,600
Cost of goods sold	373,800
Expenses (including wages but not depreciation)	53,400
Depreciation	32,040
Net Profit	21,360

Other information was provided as follows:

Land was sold at cost price of $53,400

Equipment was sold during the year at its written down value of $80,100

Dividends of $18,690 were paid during the year

Repayments totalling $42,720 were made on the mortgage payable during the year

Machinery costing $149,520 was purchased for cash

Required:

Prepare the Statement of Cash Flows using the Direct Method. (Refer to ILT report page 23 for layout)

Reconcile net profit to the net cash flow from operating activities. (Refer to ILT report page 37 for layout)