Lekorlas Sdn. Bhd. www Cash Flow Statement for the year ended December 31, 2017 RM RM Cash Flow from Operating Activities Net profit 150,000 Adjustments to earn cash from operations: Depreciation 30,000 Gain from sale of machine (15,000) Changes in working capital Decline in trade receivables 8,000 Increase in inventory of merchandise (16,000) Decrease in trade payables 14,000 Decrease in accrued spending (7,000) Net cash flow from operating activities 164,000 Alir tunai dari aktiviti pelaburan Cash receipts from machine sales 75,000 Cash payment for equipment purchase (45,000) Net cash flow from investment activities 30,000 Cash flow from financing activities Payment of cash dividends Net cash flows are used in financing activities Net increase in cash and cash equivalents Cash balances and cash equivalents as at 1 January 2017 Cash balances and cash equivalents as at 31 December 2017 (40,000) (40,000) 154,000 66,000 220,000 After examining the Cash Flow Statement above, En. Lazim has contacted you to seek clarification on some of the following questions that have confused him: 1. Why is it necessary to attach a Cash Flow Statement when the bank can determine the movement in cash by looking at the difference between the initial cash balance and the final cash balance? 2. What is the difference between operating activities, investment activities and financing activities? 3. Why is it necessary to show cash flows for operating activities, investment activities and financing activities separately when they are all business activities? 4. Why is it necessary to make an adjustment to net income to earn cash from operations when net income already takes into account all cash inflows and outflows? Be required: Give an explanation to questions 1 to 4 submitted by En. Common.