These are the financial statements of Metro Meats Ltd.

METRO MEATS LTD Statement of financial position as at 31 December 2018
	2018	2017
ASSETS
Cash	$129 000)	$115 000)
Accounts receivable	28 000)	14 000)
Inventory	25 000)	35 000)
Property, plant and equipment	60 000)	78 000)
Accumulated depreciation	(20 000)	(24 000)
Total assets	$122 000)	$118 000)
LIABILITIES AND EQUITY
Accounts payable	$126 000)	$125 000)
Dividends payable	3 000)
Income tax payable	5 000)	8 000)
Debentures payable	27 000)	33 000)
Share capital	18 000)	14 000)
Retained earnings	43 000)	38 000)
Total liabilities and equity	$122 000)	$118 000)

 

METRO MEATS LTD Statement of profit or loss for the year ended 31 December 2018
Sales	$250 000)
Cost of sales	210 000)
Gross profit	40 000)
Selling expenses	18 000)
Administrative expenses	6 000)
Interest expense	2 000)
Profit before income tax	14 000)
Income tax expense	4 000)
Profit	$10 000)

The following additional data were provided:

1. The entity paid an interim dividend of $2000 and declared a final dividend.
2. During the year equipment was sold for $8500 cash. This equipment cost $18 000 originally and had a carrying amount of $8500 at the time of sale.
3. All depreciation expense is in the selling expense category.
4. All operating expenses except for depreciation were paid in cash.
5. 
   

Required

1. Prepare a statement of cash flows using the direct method.
2. Reconcile profit to cash provided by operating activities.