Rona Ltd requires a Statement of Cash Flows to be prepared for the year ended 31 March 2020; the following general ledger balances have been provided.

As at 31 March:	2019	2020
Cash	$76 000	$39 000
Accounts receivable	220 000	280 000
Less Allowance for doubtful debts	30 000	40 000
Inventory	90 000	117 600
Plant and equipment	900 000	1 104 000
Less Accumulated depreciation	80 000	100 000
Accounts payable	80 000	70 000
Bank overdraft	1 000	20 000
Interest payable	-	200
GST payable	10 000	15 000
Operating expenses payable	15 000	47 800
Dividends payable	-	17 600
Share capital	500 000	520 000
Retained earnings	570 000	680 000
Asset revaluation surplus	-	30 000
For the year ended 31 March:		2020
Sales - credit		$873 000
Sales - cash		12 000
Less expenses:
COGS		240 000
Depreciation expense		90 000
Doubtful debts expense		40 000
Interest expense		900
Operating expenses		220 000
Loss on sale of equipment		4 000
Repairs and maintenance expense		3 000
Income tax expense		77 000
Profit after tax		210 100
Revaluation gain		30 000
Total Comprehensive Income		$240 100

Question 3 continued:

Additional information:

(i) During the year ended 31 March 2020 equipment, that originally cost $100 000, was sold.

(ii) Rona Ltd uses the indirect method for presenting cash flows from operating activities.

(iii) Classify any dividends paid as a cash flow from financing activities.

(iv) Some items of plant and equipment were revalued, for the first time, during the current financial year.

(v) Classify any interest paid as a cash flow from operating activities.

Required:

1. Prepare a Statement of Cash Flows for Rona Ltd, for the year ended 31 March 2020, in accordance with NZ IAS 7 Statement of Cash Flows.

2. Prepare a Statement of Cash Flows for Rona Ltd, for the year ended 31 March 2020, in accordance with NZ IAS 7 Statement of Cash Flows, but assume Rona Ltd uses the direct method for presenting cash flows from operating activities.