The following is the financial information of Locust Ltd:

Statement of profit or loss for the year ended 30 September, 2018

	$
Sales	212,300
Cost of goods sold	(140,900)
Gross profit	71,400
Expenses:
Depreciation expense	(13,430)
Increase in bad debts provision	(120)
Interest expense	(1,400)
Other operating expenses	(38,480)
Other gains and losses:
Gain on sale of plant and machinery	720
Profit before tax	18,690
Tax expense	(3,022)
Profit after tax	15,668

Extracts of statement of financial position as at 30 September

	2018	2017
Assets	$	$
Property, plant and equipment	152,270	144,430
Long-term investment	1,000	6,500
Inventory	26,800	28,000
Accounts receivable	20,830	16,100
Other receivable	1,280	780
Total Assets
	202,180		195,810
Liabilities and Owners Equity
Share capital	72,500	68,500
Retained profits	69,428	73,760
	141,928		142,260
Long-term loan stocks	38,000	24,000
Accounts payable	16,850	16,160
Other payable	650	1,750
Interest payable	520	560
Tax payable	2,572	1,980
Bank overdraft	1,660	9,100
Liabilities and owners equity	202,180		195,810

The following information relates to 2018:

Plant and machinery with a written down value of $7,400 was sold during the year for $8,120.

Long-term investment was sold for $5,500. No gain or loss was recorded.

The company paid a cash dividends of $20,000 during the year.

Required

Prepare a statement of cash flows for the year ended 30 September 2018 using the indirect method to compute the cash flows from operating activities.

Prepare the Cash flows from operating activities section of the statement of cash flows for the year ended 30 September 2018 using the direct method. Show your workings clearly.

Based on your workings in (a) above, comment on the cash flows of Locust Ltd for the year ended 30 September 2018.