The information below relates to Cascade Ltd.

Additional information in relation to the year ended 30 June 2021 

1. A loan payable of $45 000 was satisfied by conversion into 45 000 ordinary shares, valued at $1 each.

2. The sold equipment cost $41 000 and had a carrying value of $34 000 when sold. Land with a carrying value of $25 000 was sold during the year for $25 000.

3. The company pays tax in four instalments on the normal due dates throughout the year. The first three instalments paid in cash were for $15 000, $12 750 and $16 000 respectively.

Required

(a) Prepare only the cash flows from the operating activities section of Cascade Ltd’s statement of cash flows for the year ended 30 June 2021 in accordance with IAS 7/AASB 107, using the direct method.

(b) Reconstruct all journal entries in relation to income tax for the year ended 30 June 2021.

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CASCADE LTD Comparative Statements of Financial Position as at 30 June ASSETS Cash at bank Accounts receivable Allowance for doubtful debts Inventory Prepaid insurance Land (at cost) Buildings (at cost) Accumulated depreciation buildings Equipment (at cost) Accumulated depreciation equipment 2021 $ 52 700 73 500 (7000) 54000 5000 45 000 200 000 (21 000) 193 000 (28 000) $ 57000 32 000 (6 000) 10000 7000 70 000 100 000 (11000) 68 000 2020 (10000) $567 200 $317 000 LIABILITIES AND EQUITY Accounts payable Interest payable Other expenses payable 75 200 56 000 2000 10000 Current tax liability 11 800 15000 Final dividend payable 19 800 4800 Loan payable 75000 130 000 Share capital (ordinary shares, issued at $1, fully paid) 220 000 60 000 General reserve 45 000 20 000 Retained earnings 108 400 31 200 $567 200 $317 000