The Statements of Financial Position for Kiwi Limited as at 30 June 2019 and 30 June 2020 are provided below:

Kiwi Limited

Statement of Financial Position as at 30 June

	2019		2020
Assets	$		$
Cash at Bank	68,000		56,000
Accounts Receivable	121,000		139,000
Inventory	44,000		41,000
Land	241,000		241,000
Plant and Machinery	319,000		414,000
Less: Accumulated Depreciation	(10,000)		(89,000)
Total Assets	$783,000		$802,000
Liabilities
Accounts Payable	55,000		54,000
Tax Payable	16,000		23,000
Loan	536,000		362,000
Total Liabilities	$607,000		$439,000
Shareholders' Equity
Share Capital	150,000		240,000
Retained Earnings	26,000		123,000
Total Shareholders' Equity	$176,000		$363,000
Total Liabilities and Shareholders' Equity	$783,000		$802,000

Question One continued on the next page

QUESTION ONE (CONTINUED)

The Statement of Financial Performance for Kiwi Limited for the financial year ended 30 June 2020 is provided below:

Kiwi Limited Statement of Financial Performance for the year ended 30 June 2020 $
Sales		614,000
Less:
Cost of Sales	307,000
Interest Expense	23,000
Other Operating Expenses	91,000
Tax Expense	46,000
Total Expenses		(467,000)
Profit		$147,000

Additional Information:

1. New machinery was purchased for cash during the year.

2. Cash dividend was declared and paid during the year.

3. Other Operating Expenses include depreciation expense of $79,000.

4. Additional shares were issued for cash during the year.

5. All sales and purchases are on credit throughout the year ending 30 June 2020.

6. Accounts Payable reflects inventory purchases on credit from suppliers.

REQUIRED:

1. Prepare a fully classified Statement of Cash Flows for Kiwi Limited for the year ended 30 June 2020 using the direct method. Show all workings.

(b) Based on the Statement of Cash Flows for Kiwi Limited that you have prepared,

provide two key insights about the cash flows for the company in relation to its ability

to meet its long-term debt obligations. (word limit: 250 words)