a) Prepare a statement of cash flows for Eidlan for the year ended 31 October 2020.

b) Identify why she has made a profit for the year, yet her bank account is overdrawn.

c) Give advice for her to improve her cash flow situation.

Eidlan is a sole trader, present you with the following financial information in respect of her financial account for the year ended 31 October 2019 and 2020. Statement of Financial Position At 31 October 2019 Assets '000 Non current assets Cost Dep NBV Freehold land 30 Plant and machinery at cost 39 21 30 39 21 48 At 31 October 2021 '000 Cost Dep NBV 60 55 25 30 55 25 90 Current assets Inventories Trade receivables Cash and cash equivalents 16 12 11 15 3 29 77 28 118 Total assets Equity and liabilities Capital Capital introduced 52 Profit for the year Drawings 52 20 (9) 61 61 10 71 50 (21) 100 8 Non current liabilities Long term loans Current liabilities Trade payables Bank overdraft 16 8 2 10 118 16 77 Income statement (extract) for the year ended 31 October 2020 '000 Profit 25 Depreciation plant and machinery (5) Profit on disposal of plant 1 Profit on revaluation of land 30 Interest paid (1) Profit for the year 50 Eidlan tells you that during the year she scrapped some of the plant which had cost $6,000. She cannot understand why she has an overdraft at 31 October 2020, despite making a profit for the year and ask for your help to explain the situation