Shown below is an extract from the comparative statements financial position and statement of profit or loss of Iron Man Ltd for the year ended 30 June 2021: Iron ManLtd Statement of Financial Position as at 30 June 30-Jun-21 30-Jun-20 CURRENT ASSETS $ $ Cash 8,300 21,300 22,000 Accounts Receivable 21,500 Allowance for Doubtful Debts (750) (650) Inventories 45,260 55,000 4,500 Prepaid Expenses 5,000 102,050 79,410 NON-CURRENT ASSETS Deferred Tax Asset 1,350 1,200 Land and Buildings - at cost 257,500 242,500 Accumulated depreciation-buildings (50,500) (46,000) 43,000 40,000 Equipment - at cost Accumulated depreciation- equipment (10,000) 241,350 (15,000) 222,700 302, 110 TOTAL ASSETS 343,400 CURRENT LIABILITIES 44,450 46,460 Accounts Payable Accrued Expenses Interest Payable 3,500 2,500 2,500 2,950 Current tax liability 8,700 6,000 59,150 57,910 NON-CURRENT LIABILITIES Deferred Tax Liability 1,850 1,650 Bank Loan (Secured) 114,500 116,100 116,350 117,750 175,660 TOTAL LIABILITIES 175,500 Share Capital 98,950 78,950 Retained Earnings 68,950 47,500 167,900 126,450 302,110 TOTAL EQUITY AND LIABILITIES 343,400 IronManLtd Statement of Profit or Loss for the year ended 30 June 2021 Income $ $ Sales 593,500 Gain on sale of land 1,500 Gain on sale of equipment 6,500 Discount received 1,100 Total Income 602,600 Less: Expenses: Cost of Sales 420,000 Depreciation Expense - equipment 4,000 Depreciation Expense - buildings 4,500 Interest Expense 3,900 Bad Debts Expense 1,100 Discount Allowed 450 Employee and Other Expenses 110,000 543,950 Profit before Tax 58,650 Income Tax Expense (17,500) Profit for the year 41,150 Required: 1. Prepare the OPERATING activities section ONLY of the statement of cash flows for IronMan Ltd for the year ended 30 June 2021 using the direct method as required by AASB 107. (8 Marks) Prepare a reconciliation of net cash flows arising from operating activities with profit. (7 marks) 2