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Q4 ) Financial data for Sharma Ltd has been provided as follows for the year ended 31st October:
2021 2022
Cash at Bank 16400 19000
Inventories 40000 52000
Account Receivables 16400 15000
Prepaid Insurance 600 700
Long Term Investments 14000 20000
Motor Vehicles 84000 90000
Accumulated Depreciation- motor vehicle (26000) (36000)
Account Payable 20000 14000
Accrued Sundry Expenses 350 275
Long term loan 19847 92000
Issued Capital 288153 208000
Sharma Ltd Income Statement
For the year ended 31st October 2022
Income $ $
Sales 450000 -
Gross Proceeds sale of Motor vehicle 3000 453000
Expenses
Cost of goods sold 320000
General Expenses Including Dep 68000 390000
Carrying amount of motor Vehicle
Sold 2000 390000
Net Profit 63000
The Vehicle which as sold originally c ost $ 10000.
Required:
- Prepare the Cash flow from Operations only of the cash flow statement for the year ended 31st October 2022.
- Explain Why in the above example the Net profit ($63000) is different to the ending Cash at Bank Balance ($19000)
- Explain the purpose of a Bank reconciliation Statement.
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