The comparative statements of financial position of Laguna Ltd as at 30 June 2016 and 2017, the statement of profit or loss and other comprehensive income and the statement of changes in equity for the year ended 30 June 2017 are shown on pages 000–00.

Additional information

(a) Other expenses include $27 000 depreciation expense on plant and insurance expense of $4000.

(b) All sales and purchases of inventory are on credit.

(c) Plant which had cost $30 000 and had a carrying amount of $17 000 was sold for $26 000 cash.

(d) Ignore taxes.                                                  

Required

A. Prepare the statement of cash flows for Laguna Ltd for the year ended 30 June 2017 using the direct method.

B. Prepare the note reconciling cash flows from operating activities to profit.