Q 4 ) Financial data for Sharma Ltd has been provided as follows for the year ended 31^st October:

2021 2022

Cash at Bank 16400 19000

Inventories 40000 52000

Account Receivables 16400 15000

Prepaid Insurance 600 700

Long Term Investments 14000 20000

Motor Vehicles 84000 90000

Accumulated Depreciation- motor vehicle (26000) (36000)

Account Payable 20000 14000

Accrued Sundry Expenses 350 275

Long term loan 19847 92000

Issued Capital 288153 208000

Sharma Ltd Income Statement

For the year ended 31^st October 2022

Income $ $

Sales 450000 -

Gross Proceeds sale of Motor vehicle 3000 453000

Expenses

Cost of goods sold 320000

General Expenses Including Dep 68000 390000

Carrying amount of motor Vehicle

Sold 2000 390000

Net Profit 63000

The Vehicle which as sold originally cost $ 10000.

Required:

1. Prepare the Cash flow from Operations only of the cash flow statement for the year ended 31^st October 2022.
2. Explain Why in the above example the Net profit ($63000) is different to the ending Cash at Bank Balance ($19000)
3. Explain the purpose of a Bank reconciliation Statement.