STATEMENT OF CASH FLOWS

STATEMENT OF CASH FLOWS The financial statements of Pump Pty Ltd appear below. Pump Pty Ltd Comparative balance sheet as at 30 June 2018 Assets 2017 2018 Cash $ 15 600 $ 27 600 Accounts receivable 39 600 28 800 Inventory 32 400 24 000 Prepaid expenses 15 600 24 000 Land 48 000 48 000 Property, plant and equipment 270 000 240 000 Less: Accumulated depreciation (81 000) (60 000) Total assets $340 200 $332 400 Liabilities and Shareholders' Equity Accounts payable $ 22 200 $ 10 800 Accrued expenses payable 9 000 11 400 Interest payable 1 800 1 200 Income taxes payable 2 400 3 600 Bonds payable 96 000 60 000 Share capital 126 000 147 600 Retained earnings 82 800 97 800 Total liabilities and shareholders' equity $340 200 $332 400 Pump Pty Ltd Statement of Profit or Loss and Other Comprehensive Income For the year ended 30 June 2018 Income Sales revenue $720 000 Gain on Sale of PPE 3 000 $723 000 Less: Expenses Cost of Goods Sold 600 000 Other expenses 81 000 Interest expense 6 000 Income tax expense 10 800 697 800 Net profit $ 25 200 7 Additional information: 1. Property Plant and Equipment assets were sold at a sales price of $75 000. 2. Additional equipment was purchased at a cost of $72 000. 3. All sales and purchases of inventory were on credit. Required 1. Prepare a cash flow statement for Pump Pty Ltd for the year ended 30 June 2018 using the direct method. Show all workings. 2. Reconcile profit and net cash provided (used) by operating activities using the indirect method.