The financial statements of Flinders Ranges Ltd appear below

Additional information:

All sales and purchases of inventory are on credit

New machinery purchased during the year cost $159,500

Old machinery was disposed of during the year

Other expenses include bad debts expensed of $750

A dividend was paid during the year

You are required to

1. Prepare a statement of cash flows for Flinders Ltd for the year ended 30 June 2018 using the direct method.

2. Reconcile profit and net cash generated (consumed) by operating activities using the indirect method.

Ensure that you show all your workings for both questions.

ASSIGNMENT DETAILS STATEMENT OF CASH FLOWS The financial statements of Flinders Ranges Ltd appear below Flinders Ranges Ltd Comparative balance sheet as at 30 June 2018 2017 2018 Assets Cash Accounts receivable Invento Prepaid rent Investments Machinery at cost Less accumulated depreciation 53,760 46,200 143,990 22,400 131,600 539,500 (72,800) 864,650 137,200 127,120 157,500 25,760 151,200 578,000 (70,000) 1,106,780 Total assets Liabilities Bank Overdraft Accounts payable Tax payable Accrued expenses payable Mortgage payable 0 218,520 75,700 23,800 140,000 458,020 37,200 190,200 101,400 23,380 119,000 471,180 Equity Share capital Retained earnings 259,000 147,630 406,630 308,000 327,600 635,600 Total liabilities and shareholders equity 864,650 1,106,780 Flinders Ranges Ltd Income Statement For the Year Ended 30 June 2018 Income Sales Revenue Less: Cost of goods sold 718,200 (242,466) 475,734 Gross profit Less expenses Interest expense Loss on sale of machinery Depreciation Other expenses (4,683) (15,750) (97,650) (26,061) (144,144) 331,590 (99,500) 232,090 Profit before tax Tax expense Net profit after tax