Condensed financial data of Takahashi Electronics Pty Ltd follow.

Additional information:

1. New equipment and machinery were purchased for cash during the year.

2. Investments were sold at cost.

3. Equipment costing $23 500 was sold for $7775, resulting in a gain of $4375.

4. A cash dividend of $40 000 was declared and paid during the year.

5. Accounts payable pertain to inventory creditors.

Required

(a) Prepare a statement of cash flows using the direct method.

(b) Prepare a reconciliation of profit to cash provided by operations.  

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Assets Cash TAKAHASHI ELECTRONICS PTY LTD Statement of financial position as at 30 June 2017 Accounts receivable Inventory Investments (long term) Plant and equipment Accumulated depreciation Total Liabilities and equity Accounts payable Accrued expenses payable Debentures payable Share capital Retained earnings Total 2017 $ 47500 43 400 60950 42 300 125 000 (24750) $294 400 $ 26350 6050 50 000 125 000 87 000 $294 400 2016 $ 23625 28 500 51325 43500 102 500 (20 000) $229 450 $24140 9415 35 000 100 000 60895 $229 450