The comparative statements of financial position of Cresta Ltd as at 30 June 2019 and 2020, and the income statement and statement of changes in equity for the year ended 30 June 2020 are shown below.

Additional information 1. Other expenses include $66 000 depreciation expense on machinery and insurance expense of $10 500.

2. All sales and purchases are on credit.

3. Lease income is earned as a result of renting part of the property that is in excess of the company’s needs.

Required

Prepare the cash flows from operating activities only for Cresta Ltd for the year ended 30 June 2020, using the direct method. Ignore taxes.

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CRESTA LTD Comparative Statements of Financial Position as at 30 June 2019 2020 ASSETS Cash at bank Accounts receivable Inventory Prepaid insurance Property Machinery Accumulated depreciation: machinery $ 19500 112 500 198 000 10 500 134 400 900 000 (201 000) $1173900 $ 69000 100 500 246 000 7500 120 000 1 080 000 (243 000) $1380 000 LIABILITIES AND EQUITY Accounts payable Interest payable Other accrued expenses Mortgage payable Share capital Retained earnings 10 200 13 500 66 000 75 000 9000 21.000 360 000 435 000 300 000 510 000 424 200 330 000 $1 173 900 $1380 000