P20 - 1 Whoosh Ltd is a company selling garden fountains and water features. The company operates from a plot of land just outside the city where it displays its range of products. The office on the property is located in a converted shipping container, included in plant and equipment. The statement of profit or loss and statement of changes in equity of Whoosh Limited for the year ended 28 February 20X6, as well as the statement of financial position of the company at 28 February 20X6, are shown below. WHOOSH LIMITED STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED 28 FEBRUARY 20X6 Sales Cost of sales Gross profit Operating expenses Loss on disposal of plant and cquipment Selling and administration Finance cost Interest expense Profit before tax Income tax expense Profit for the period 2 081 800 (1 312 600) 769 200 (386 400) 8 000 378 400 (75 200) 307 600 (68 400) 239 200 WHOOSH LIMITED STATEMENT OF FINANCIAL POSITION AT 28 FEBRUARY 20X6 20X6 C 20X5 ASSETS Non-current assets Land: cost Plant and equipmentcost Plant and equipment: accumulated depreciation 890 000 725 000 531 000 (366 000) 821 000 600 000 504 000 (280 000) Current assets Inventory Accounts receivable Expenses paid in advance Bank 895 200 360 000 200 000 1 200 334 000 722 000 440 000 240 000 2000 40 000 1 785 200 1 546 000 900 200 475 000 425 200 706 000 400 000 306 000 EQUITY AND LIABILITIES Equity Share capital Retained earnings Non-current liabilities Mortgage loan Current liabilities Accounts payable Current tax payable Dividends payable 645 000 240 000 128 000 52 000 60 000 560 000 280 000 194 000 36 000 50 000 1 785 200 1 546 000 WHOOSH LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 28 FEBRUARY 20X6 Share capital 400 000 Balance at 1 March 20X5 Profit for the period Dividends Issue or share capital Balance at 28 February 20X6 Retained earnings 306 000 239 200 (120 000) Total 706 000 239 200 (120 000) 75 000 900 200 75 000 475 000 425 200 Additional information: 1. Plant and equipment which cost C48 000 were sold and accumulated depreciation to the date of sale amounted to C34 000. 2. An amount of C40 000 was repaid on the mortgage loan. 3. Included in other operating expenses is a depreciation expense of C120 000. You are required to: a. Prepare a statement of cash flows for Whoosh Limited for the year ended 28 February 20X6, using the direct method. b. Prepare a statement of cash flows for Whoosh Limited for the year ended 28 February 20X6, using the direct method, showing the cash flow from operating activities section only