The financial statements of Costanza Ltd are provided below.

Balance Sheet

as at 30 June

2020

2019

Assets

$000

$000

Cash at bank

228

117

Trade receivables

350

250

Allowance for doubtful debts

(56)

(45)

Inventories

540

445

Long-term investment

20

20

Building - at cost

480

480

Accum depreciation- buildings

(72)

(48)

Plant & equipment - at cost

504

480

Accumdepreciation - plant & equip.

(48)

(48)

Deferred tax asset

27

0

TOTAL ASSETS

1 973

1 651

Liabilities and equity

Accounts payable

290

334

Accrued Expenses

22

45

Interest payable

12

6

Dividend payable

20

0

Current tax liability

73

35

Deferred tax liability

14

4

Mortgage

540

440

Share capital

430

400

Retained earnings

572

387

Total liabilities and equity

1 973

1 651

Income Statement

for the year ended 30 June 2020

$000

Sales (all sales are credit sales)

2 300

Interest received

3

Gain on sale of Plant & Equipment

8

Total income

2 311

Cost of Goods sold

780

Other expenses

683

Doubtful debts expense

90

Interest expense

25

Depreciation - Buildings

24

Depreciation - Plant & Equipment

84

Total expenses

1 686

Profit before income tax

625

Income tax expense

220

Profit

405

Additional information:

a)The plant and equipment with a carrying amount of $26,000 (cost $110,000 and accumulated depreciation $84,000) was sold.

b)New plant and equipment was purchased in cash during the year.

c)There was no sale of long-term investments during the year.

d)There are no cash sales during the year.

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

f)The income tax rate is 30%.

Required:

a)From the data presented above, prepare the statement of cash flows for the year ended 30 June 2020, using the direct method.(14 Marks)

b)Also need a note reconciling the net cash from operating activities to profit.(8 Marks)

Note:You are required to show ALL workings and round up to the nearest dollar.