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
Accum depreciation 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 prepare 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.