Problem - Below is an extract of King Ltd's comparative Statement of Financial Position as at 30 June 2016 and a Statement of Profit or Loss for the period ending 30 June 2016 below:
Extract Statement of Financial Position as at 30 June 2016
|
2016 $
|
2015 $
|
|
Accounts receivable
|
120,000
|
77,000
|
|
Inventory
|
150,000
|
80,000
|
|
Deferred tax asset
|
12,000
|
13,500
|
|
Accounts payable
|
120,000
|
60,000
|
|
Current tax liability
|
17,000
|
7,500
|
|
Deferred tax liability
|
25,000
|
21,000
|
Statement of Profit or Loss for period ending 30 June 2016
|
Income:
|
$
|
$
|
|
Sales revenue
|
485,000
|
|
|
Rent revenue
|
14,000
|
|
|
Discount received
|
1,000
|
500,000
|
|
Expenses:
|
|
|
|
Cost of sales
|
365,000
|
|
|
Discount allowed
|
1,500
|
|
|
Bad debts
|
4,500
|
|
|
Salaries and wages
|
39,000
|
|
|
Loss on sale of equipment
|
5,000
|
|
|
Depreciation - equipment
|
10,000
|
|
|
Depreciation - buildings
|
30,000
|
(455,000)
|
|
Profit before tax
|
|
45,000
|
|
Income tax expense
|
|
(17,000)
|
|
Profit after tax
|
|
$28,000
|
Additional information:
Land was revalued upwards by $8,000 during the year. The company tax rate is 30%.
Required: Using the DIRECT METHOD, prepare the cash flows from operating activities section of the cash flow statement for the year ended 30 June 2016.