Shown below is an extract from the comparative statements of financial position and statement of profit or loss of Opal Ltd for the year ended 30 June 2021:

Opal Ltd
Balance Sheet
as at 30 June
	2021	2020
	$000	$000
Cash at bank	55	30
Trade receivables	245	218
Allowance for doubtful debts	(45)	(42)
Inventories	445	480
CURRENT ASSETS	700	686
Plant & equipment at cost	520	480
Accum depreciation plant & equip.	(105)	(80)
NON-CURRENT ASSETS	415	400
TOTAL ASSETS	1,115	1,086
Accounts payable	289	322
Accrued Expenses	20	45
Interest payable	10	6
Current tax liability	32	35
CURRENT LIABILITIES	351	408
Mortgage	400	330
NON-CURRENT LIABILITIES	400	330
TOTAL LIABILITIES	751	738
NET ASSETS	364	348
Share capital	200	200
Retained earnings	164	148
TOTAL EQUITY	364	348

Opal Ltd
Income Statement
for the year ended 30 June 2021
Revenue	$000
Sales (all sales are credit sales)	350
Total income		350
Less:
Cost of Goods sold	140
Other expenses	20
Doubtful debts expense	10
Interest expense	23
Depreciation Plant & Equipment	25
Total expenses		218
Profit before tax	132
Less: Income Tax Expense	40
PROFIT AFTER TAX	92

Additional information:

a) New plant and equipment was purchased in cash during the year. No plant or equipment was sold during the year.

b) There are no cash sales during the year.

c) The company pays tax once only before the end of financial year.

d) The income tax rate is 30%.

Required:

1. Prepare the statement of cash flows for Opal Ltd for the year ended 30 June 2021 using the direct method as required by AASB 107. (11 Marks)

2. Prepare a reconciliation of net cash flows arising from operating activities with profit. (4 marks)