Financial figures of the business of K. Towd for the last 2 years are shown below.

Additional information 1. During the year ended 30 June 2025, Towd withdrew \($60\) per week in cash for 52 weeks for private purposes.
2. Towd also withdrew \($2400\) on her business bank account to pay her personal income tax.
3. Land, shown in the accounts at \($12\) 000, was sold during the year for \($16\) 800.
4. Plant costing \($3600\) and written down to \($1800\) was sold for $1440.
5. Ignore GST.
Required

(a) Prepare a statement of cash flows for the year ended 30 June 2025 using the direct method.

(b) Prepare the note to the above statement reconciling cash flows from operating activities with profit.

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K. TOWD Comparative statements of financial position as at 30 June 2024 2025 Assets Cash at bank $ 5640 Accounts receivable Inventory $ 8400 28 800 10 200 33 600 Plant and equipment Accumulated depreciation - plant and equipment $18000 8400 $21 600 9 600 9000 12 600 Land 24 000 12 000 Buildings 24000 24 000 Accumulated depreciation - buildings 1200 22 800 1 680 22 320 $93 600 $96 360 Liabilities and equity Accounts payable $14400 $15 600 Bank overdraft 6000 K. Towd, capital 73200 80 760 $93 600 $96 360 The statement of financial performance for the business for the year ended 30 June 2025 reveals the following details. Income Sales revenue Other income Gain from sale of land Expenses Cost of sales Depreciation of plant and equipment Depreciation of buildings Loss of sale of plant Other expenses Profit K. TOWD Statement of financial performance for the year ended 30 June 2025 $19200 2400 480 360 5280 $36000 4 800 40 800 27 720 $13080