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The following summarised information from Lumberjack Spratt Ltd is provided

Lumberjack Spratt Ltd Summarised Comparative Statement of Financial Position as at 30 June 2018
	2018	2017
	$	$
Cash	931,301	437,807
Receivables	315,715	111,840
Allowance for Doubtful Debts	(6,315)	(2,237)
Interest Receivable	6,524	6,524
Inventory	503,280	335,520
Office Supplies	15,844	8,854
Prepaid Insurance	10,485	5,825
Investments (long term)	559,200	326,200
Plant and Equipment	1,118,400	1,048,500
Accumulated depreciation	(361,150)	(333,190)
	3,093,284	1,945,643
Accounts payable	354,917	128,150
Accrued interest	15,145	11,650
Current tax payable	156,873	27,960
Accrued Expenses - Electricity	11,650	18,640
Borrowings	291,250	186,400
Share capital	1,281,500	932,000
Retained earnings	981,949	640,843
	3,093,284	1,945,643

Lumberjack Spratt Ltd Summarised Statement of Profit and Loss and Other Comprehensive Income' for the year ended 30 June 2018
	$
Sales	2,300,875
Cost of Sales	(1,165,000)
Gross profit	1,135,875
Distribution Costs	(174,750)
Administration Costs	(423,070)
Interest Expense	(15,145)
Profit before tax	522,910
Income Tax Expense	(156,872)
Profit for the year	366,038
Other comprehensive income
Interest Revenue	6,524
Gain on sale of Equipment	3,495
Total comprehensive income	376,057

Additional information

1. A dividend of $34,950 was paid during the year.
2. Equipment that had an original cost of $46,600 and a carrying amount of $4,660 was sold during the year for $8,155. New equipment costing $116,500 was purchased on 28 June 2018.
3. Depreciation Expenses are included as a part of Distribution Expenses.
4. The Allowance for Doubtful Debts represents 2% of receivables outstanding; Doubtful debts expenses are included in Administration Expenses.
5. Insurance Expenses of $17,475 are included in Administration Expenses. Electricity Expenses of $29,265 are included as a part of Administration Expenses.
6. Supplies expensed during the year were $5,277 and are included as a part of Administration Expenses.
7. Interest Revenue relates to long term investments.

Required:

1. Using the Direct Method prepare a Statement of Cash Flows for the year ended 30 June 2018. Show all workings. (19 Marks)
2. Prepare a note that explains the difference between the net cash from operating activities and the profit after tax for the year ended 30 June 2018. (6 Marks)

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