Jimmy is the director of Hazina Motors Co Ltd. he was presented with the financial statement for the year ending 30^th September 2020. The bank balance was 400,000 overdraft and cash balance of 40,000. The net profit after tax for the same period amounted to 2,000,000. He wonders why the cash and bank balances do not match the net profit.

Required

Prepare a detailed report to the director explaining the reason for the difference as he noted