Reference no: EM131612437

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.