Statements of financial position for Metal Bashers plc, together with extracts from the statement of profit or loss and relevant notes, are given below. Metal Bashers plc produces machine tools for industrial use.

Metal Bashers plc: statements of financial position at 30 September 2019 and 30 September 2018

During the year to 30 September 2019:

• Metal Bashers plc paid total dividends of £1,080,000

• New patents costing £70,000 were acquired

• Amortization charged on patents was £20,000

• 1.6 million new shares were issued during the year for cash at a price of £3 each

• Finance income and finance expense represent the actual cash received and paid during the year

• Income tax of £375,000 was paid during the year

• New property, plant and equipment costing £5,000,000 was purchased during the year for cash

• Redundant property, plant and equipment with a carrying amount of £250,000 was sold for £175,000

• Depreciation of £1,800,000 was charged on property, plant and equipment during the year

Required

(a) Prepare the statement of cash flows for Metal Bashers plc for the year ended 30 June 2019 using the indirect method.

(b) If total cash received from sales amounted to £9,550,000, total cash paid to trade payables for raw materials and expenses was £5,100,000 and total cash paid to employees was £1,280,000, show how the cash flow from operating activities would be presented under the direct method for preparing the statement of cash flows.

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Assets Non-current assets Intangible assets: patents Property, plant and equipment 2019 £000 200 21,800 22,000 2018 £000 150 18,850 19,000