Comparative information as at 30 June 2020 and 30 June 2021 for Pretentious Ltd is as follows.

Additional information

1. Gross profit for the year ended 30 June 2021 was $321 000, and consisted of the following.

2. Purchases of inventory for the year were $545 000.

3. All purchases and sales of inventories were on credit.

4. Profit for the year ended 30 June 2021 was $62 500, after deducting expenses of $258 500 from the gross profit figure.

5. Expenses of $258 500 include depreciation on buildings, and on plant and equipment, a loss on sale of land, and $10 000 in interest expense.

6. During the year ended 30 June 2021, cash dividends were paid.

7. Building extensions were paid for during the year, and a block of land, costing $75 000, was sold for $62 500 cash.

8. No plant was purchased or sold during the year.

Required

(a) Prepare the statement of cash flows for Pretentious Ltd for the year ended 30 June 2021 using the direct method.

(b) Show how cash flows from operating activities in the statement would be presented under the indirect method.

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ASSETS Cash at bank PRETENTIOUS LTD Comparative Statements of Financial Position as at 30 June Accounts receivable Inventory Land Buildings Accumulated depreciation - buildings Plant and equipment Accumulated depreciation plant and equipment LIABILITIES AND EQUITY Accounts payable Interest payable Other expenses payable Mortgage loan payable Share capital Retained earnings 2020 $ 124000 152000 248000 2021 $ 86000 169 000 227 000 125000 50 000 275000 530 000 (170000) 80000 (10000) $ 824000 121 000 (200 000) 80 000 (20000) $ 922 000 134 000 500 1500 17500 6000 90000 132 500 250 000 250 000 344 000 $ 824000 399 000 $ 922000