b) Prepare a Statement of Cash Flows for the month. (Total 15 marks) Question 1 Statement of Cash Flows Cash Flows from operating activities Use the following information and prepare an Income Statement (to calculate the net profit) and a Statement of Cash Flows for the month. Identify 2 causes for the difference between net profit and cash flow from operating activities. Describe what the Cash Flow Statement reveals. Cash balance, start of month Cash balance, end of month Cash sales Collections from accounts receivable Cost of sales Credit sales 25,600 Insurance expense 29,800 Insurance paid in advance for the next 6 months 82,000 Inventory purchased for cash 45,000 Office expenses pald 79,000 Payment on accounts payable 58,000 Proceeds from borrowings 2,700 Proceeds from sale of office furniture 20,000 Purchase of office furniture and computer for cash Wages pald 4,800 2,800 38,000 8,000 44,000 53,000 Depreciation expense 7,000 48,000 Drawings (cash) 22,000 Net cash provided from operating activities Cash from Investing Activities a) Prepare an Income Statement to calculate the net profit. (Total 7 marks) Income Statement $ Net cash used in investing activities Cash from financing activities Net cash provided from financing activities Net increase/(decrease) in cash for the month Cash at beginning of the month Cash at the end of the month Page 1 of 4 Page 2 of 4