The financial statements of Sierra Ltd are presented as follows: Sierra Lid Statement of Financial Position as at 31 Des 2016 5 000 70001 2000 Dec 46000 71000 25 000 Dec 194000 9000 125 000 e deration Cound 29 00011 000 18 000 Increase 395 000 201 od 24000 41 000 17 000 Decrease on 220 000 100 000 1 206000136 000 572000388 000 000 Increase 70 000 Increase Retained earnings Total Sierra Lid Statement of Profit or Loss for year ended 31 Dec 2016 Sos 885 000 Cost of sales 1460 000 Operating Expense 1220 000 Interest expense 15 000 695 000 Proft before tax 190 000 Income tax expensel 70 000 Profit 120 000 Additional information: Operating expenses include depreciation expense of $35 000 Cash dividends of $55 000 were declared and paid in 2016. Interest expense of $12 000 was paid in cash. .Land was sold at its carrying amount for cash in 2016. During 2016, equipment with a cost of $170 000 was purchased for cash. Equipment with a cost of $40 000 and carrying amount of $35 000 was sold. . In 2016, convertible notes of $15 000 were redeemed at their carrying amount for cash; convertible notes of $30 000 were converted into ordinary shares issued at $30 000 in total. Ordinary shares were issues for $120 000 in cash during 2016. Required: Prepare a statement of cash flows using the direct method. Show workings (25 marks) Cash flow statement using the direct method: Sierra Ltd Statement of Cash Flows for the year ended 31 Dec 2016 Cash flows from operating activities M Net cash by Operating activities Cash flows from investing activities: Nor cash by investing activities Cash flows from financing activities Nel cast by financing activities Casa begining of period Cash and of period Non cash investing and financing activities [Show workings)