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The Kinetic Marketing Ltd. was established on 1 July 2017 as a sole trader business, specialising in providing marketing services. The owner, Emma, contributed $100 000 in cash to the business and did not withdraw funds for the year. For the year ended 30 June 2018, the following events occurred in the business: 1. Received $280 000 cash for marketing services provided. 2. Paid cash expenses of $200 000 for office supplies and labour. 3. At the end of the year, the business purchased a vehicle for $32 000 cash and a new computer design system for $50 000 cash. 4. The business leases premises as an office. Lease rental cash payments for the year amounted to $33 000. 5. The business purchased for $80 000 a block of land on which Jenny hopes to build an office in the new year. To help pay for the land, the business had to borrow $30 000 from a bank and the remainder was paid in cash. Required i. Prepare an income statement for the year ended 30 June 2018 (3 marks) ii. In the above first part where you prepared income statement, did you calculate accounting profit or taxable profit? What is the difference between accounting profit and taxable profit? What are the equations to calculate accounting profit and taxable profit? (2 marks) iii. Prepare a statement of cash flows for the year ended 30 June 2018 (8 marks) iv. Discuss if a business can operate profitably and still have a net cash outflow for the year. (2 marks)

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