Jamie Bard is the owner Caf Corner, a popular restaurant located at a busy traffic intersection in the city of Clutchmore.

For the financial year ended 30 June 2020: Caf Corner earned a profit after income tax of $16,000. This was after taking into account sales of $821,000 and cost of sales of $623,000.

Other operating expenses incurred to operate the business totalled $179,000. This figure included: (i) depreciation expenses, and (ii) interest expenses of $11,000 which were fully paid.

There were some additional plant and equipment purchased for cash. However, there were no disposals of property, plant and equipment.

The company paid $7,000 to the Tax Office in full settlement of its income tax obligations.

The company received some interest income amounting to $4,000 when it placed some of its excess cash in an investment fund.

The shareholders of Caf Corner received dividends of $18,000 from the company.

The following are balances extracted from the Statements of Financial Position of Caf Corner at the end of its most recent two financial years: 30 June 2020 30 June 2019 $ $ Accounts payable 12,000 27,000 Accounts receivable 28,000 103,000 Accrued expenses 5,000 11,000 Accumulated depreciation 84,000 65,000 Cash 34,000 23,000 Inventory 72,000 46,000 Plant and equipment 293,000 228,000 Prepaid expenses 4,000 15,000 Share capital 180,000 160,000

Jamie wants to understand the cash flow of Caf Corner better and has asked for your assistance to help him prepare some information regarding the cash flows of the business.

Required:

a) Calculate the cash receipts from customers, cash payments to suppliers and cash payments for other expenses. Show all workings. (7 marks)

b) Using the direct method, prepare the Statement of Cash Flows for Caf Corner for the financial year ended 30 June 2020. (6 marks)

c) Prepare a reconciliation of Cash Flows from Operating Activities and Profit After Tax for Caf Corner. (4 marks)