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

Crystal Ltd
Balance Sheet
as at 30 June
	2021	2020
	$000	$000
Cash at bank	60	30
Trade receivables	250	218
Allowance for doubtful debts	(50)	(42)
Inventories	450	480
CURRENT ASSETS	710	686
Plant & equipment at cost	525	480
Accum depreciation plant & equip.	(110)	(80)
NON-CURRENT ASSETS	415	400
TOTAL ASSETS	1,125	1,086
Accounts payable	294	322
Accrued Expenses	25	45
Interest payable	12	6
Current tax liability	37	35
CURRENT LIABILITIES	368	408
Mortgage	430	330
NON-CURRENT LIABILITIES	430	330
TOTAL LIABILITIES	798	738
NET ASSETS	327	348
Share capital	200	200
Retained earnings	127	148
TOTAL EQUITY	327	348

Crystal 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	150
Other expenses	20
Doubtful debts expense	15
Interest expense	23
Depreciation Plant & Equipment	30
Total expenses		238
Profit before tax	112
Less: Income Tax Expense	40
PROFIT AFTER TAX	72

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 Crystal 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)