Complete all exercises and be sure to clearly show your workings. 1. The accountant of M. Albright, a sole trader in cotton materials, presents her annual balance sheets of the last two years as shown below. (All amounts in ) 2019 2020 Non-current assets 31.000 37.000 Accumulated depreciation (3.000) (3.400) 28,000 33,600 Current assets Inventory 6,200 11,800 Trade accounts receivable 7,800 6,800 Bank 3.000 17.000 18.600 Total assets 45,000 52,200 Current liabilities Trade accounts payable 4,000 4,400 Bank overdraft 1,800 Total liabilities (4,000) (6,200) Net assets 41,000 46,000 Capital account Balance at 1/1 40,000 41,000 Net profit for the year 14,000 17,000 Additional capital introduced 4,000 Drawings (13,000) (16,000) Total capital 41,000 46,000 The accountant is faced with the task of explaining Mrs. Albright why she has an overdraft, despite the fact that she made more profit than the year before and has brought in capital during the year. Use a maximum of 300 words excluding the calculations for part (a) of the answer. (a) Required: Draw up a cash flow statement to help the accountant in explaining to Mrs. Albright how his overdraft has come about (6 Marks) (b) Based on the concepts learned in this course, explain how this company can apply the cash flow for cash management (5 Marks). Use a maximum of (c) With relevant principles learned in this course explain whether profit for the year is equivalent to cash and provide reasons for your answer ( 2 Marks). (c) Comment on the financial health and advise to the management of the company (2 Marks)