The comparative statements of financial position of Hutt Electrical as at 30 June 2016 and 2017 and the income statement for the year ended 30 June 2017 are shown overleaf.

Additional information

•    Other expenses include $55 500 depreciation expense.

•    All sales and purchases of inventory are on credit.

Required

A.    Prepare a statement of cash flows from operating activities only for Hutt Electrical for the year ended 30 June 2017 using the direct method.

B.    Repeat requirement A using the indirect method.

Hutt electrical Comparative Statements of Financial Position as at 30 June
					2016				2017
	ASSETS Cash at bank Accounts receivable Inventory Prepaid insurance Property Plant and equipment Accum. depreciation – plant and equipment					$   22 500 82 500 165 000 7 500 190 500 757 500   (102 000)				$    69 000 70 500 216 000 1 500 172 500 1 072 500   (154 500)
	TOTAL ASSETS					$1 123 500				$1 447 500
	LIABILITIES AND EQUITY Accounts payable Interest payable Other accrued expenses Mortgage payable Share capital Retained earnings					$    64 500 7 500 13 500 367 500 500 000   170 500				$  75 000 4 500 18 000 442 500 750 000    157 500
	TOTAL LIABILITIES AND EQUITY					$1 123 500				$1 447 500

	Hutt electrical Income Statement for the year ended 30 June 2017
	Sales Less: Cost of sales								$1 047 000   780 000
	Gross profit Add:Other income:    Rent income    Gain on sale of property				$     9 000   20 000				267 000     29 000
									296 000
	Less:  Expenses:   Interest expense   Loss on sale of plant   Other expenses				34 500 6 500 231 000				272 000
	Profit								$   24 000