Question 5 Draft comparative balance sheets of Alpha Sdn Bhd as at 31 December 2019 and 2018 are as following:-

Statement of Financial Position As At 31 December 2019

	2019 (RM'000)	2018 (RM'000)
Assets
Non-Current Assets
PPE	21,120	16,000
Intangible assets (note ii)	1,500	4,200
Investment properties (note iii)	4,200	4,600
Current assets
Inventories	2,200	1,700
Trade receivables	1,600	1,840
Tax recoverable	-	150
Bank	420	-
Total assets	31,040	28,490
Equity and Liabilities
Equity
Share capital (note iv)	15,000	12,500
Revaluation reserve	2,400	2,100
Retained earnings	6.680	7,300
Non-current liabilities
6% Loan notes (note v)	4,700	4,700
Deferred tax	820	630
Current liabilities
Trade payables	1,350	1,080
Bank overdraft	-	180
Tax payable	90	-
Total equity and liabilities	31,040	28,490

Draft income statement for the year ended 31 December 2019

	RM'000
Sales	23,220
Less : cost of sales	(10,520)
Gross profit	12,700
Gain on change in fair value of investment properties (note iii)	900
Distribution cost	(1,600)
Administrative expenses (note i) & (note ii)	(7,690)
Finance costs	(240)
Profit before tax	4,070
Income tax expenses	(1,230)
Profit for the year	2,840

The following information is available: (i) An equipment with a carrying value of RM4,230,000 was sold during the year for RM3,850,000. Depreciation for all property, plant and equipment for the year was RM2,460,000. (ii) The intangible asset refers to a brand which was acquired few years ago. Alpha determined the brand to have an indefinite useful life. An impairment test carried out on 1 January 2019 revealed that the brand suffered an impairment loss of RM1,200,000. The remaining useful life of the brand was two years. There was no addition or disposal of intangible assets during the year. (iii) Alpha adopts the fair value model in the subsequent measurement of its investment properties in accordance with MFRS 140 Investment Property. During the year, it sold one of its investment properties for RM1,800,000. No purchases were made during the year. (iv) There was an issue of shares for cash on 1 October 2019. There were no bonus issues of shares during the year. (v) The 6% loan notes were issued five years ago. There was no issue or redemption of the loan notes during the year. Required:- (a) Prepare the cash flow statement for Alpha for the year ending 31 December 2019 using the direct method. [24 marks] (b) Show the reconciliation of profit before tax to net cash flow from operating activities. [6 marks]