Statements of Financial Position for Tyler Ltd as at 30 June 2021 and 30 June 2020 are provided below:

Tyler Ltd Statement of Financial Position as at 30 June
	2021		2020
Assets	$		$
Cash at bank	110,000		38,400
Accounts Receivable	92,800		35,000
Inventory	112,500		102,850
Prepaid Expenses	18,400		14,000
Machinery and Equipment	310,000		282,500
Less: Accumulated Depreciation	-50,000		-52,000
Total Assets	593,700		420,750
Liabilities
Accounts Payable	92,000		67,300
Accrued Expenses	16,700		17,000
Notes payable	125,000		130,000
Total Liabilities	233,700		214,300
Shareholders' Equity
Share Capital	126,000		101,000
Retained Earnings	234,000		105,450
Total Shareholders' Equity	360,000		206,450
Total Liabilities and Shareholders' Equity	593,700		420,750

The Income Statement of Tyler Ltd for the financial year ended 30 June 2021 is provided below:

Tyler Ltd Income Statement for the year ended 30 June 2021 $
Sales		372,000
Less:
Cost of sales	130,460
Depreciation Expense	46,500
Other Operating Expense	27,410
Loss on sale of equipment	7,500
Total Expenses		211,870
Profit		160,130

Additional Information:

1. New machinery was purchased for cash during the year. No sale of machinery took place during the year.
2. Equipment having an original cost of $57,500 was sold for cash during the year. Accumulated depreciation of the equipment sold was $48,500 at the point of sale.
3. Cash dividend was declared and paid during the year.
4. Additional shares were issued for cash during the year.
5. All sales and purchases were made on credit throughout the year ending 30 June 2021.
6. Accounts Payable reflects inventory purchases on credit from suppliers.

REQUIRED:

1. Prepare a fully classified Statement of Cash Flows for Tyler Ltd for the year ended 30 June 2021, using the direct method to present cash flows.

b. The cash return on sales ratio is a profitability ratio and is one of the important cash based ratios that can be used to evaluate an entity. Calculate the cash return on sales ratio for Tyler Ltd and comment on the profitability of Tyler Ltd for the year ending 2021. (A formulae sheet is provided at the end of this assessment paper)