KOSINSKI MANUFACTURING LTD Statement of profit or loss for the year ended 31 December 2016 Revenues $6 583 000 Cost of sales $4 000 000 Operating expenses, excluding depreciation 893 000 Depreciation expense 880 000 Loss on sale of machinery 27 000 5 800 000 Profit before income tax 783 000 Income tax expense 353 000 Profit 5430 000 Machinery was purchased at a cost of $750 000. The following balances are reported on Kosinski's 2016 statement of financial position at 31 December: 2016 2015 Cash $672 000 $130 000 Accounts receivable 775 000 610 000 Inventories 834 000 867 000 Accounts payable 521 000 501 000 Provision for warranty 103 000 106 000 Machinery 3 020 000 2 400 000 Accumulated depreciation 1 647 000 800 000 Loan payable 1 200 000 1 000 000 Share capital 1 500 000 1 500 000 Retained earnings 330 000 100 000 REQUIRED a. Prepare the statement of cash flows using the direct method. b. Prepare the reconciliation of profit and cash provided by operating activities