Question 1 The statement of financial position of Chamber Ltd. as at 31 December 2020 and 2021 and a summary of the income statement for the year ended 31 December 2021 are as follows: Statement of financial position as at 31 December Non-current assets Land and buildings Plant and machinery Investment \begin{tabular}{rr} 37,000 & 45,000 \\ 16,500 & 18,500 \\ 6,000 & 6,000 \\ \hline 59,500 & 69,500 \end{tabular} Current assets Inventory Trade receivables Cash at bank Total assets \begin{tabular}{rr} 11,412 & 13,631 \\ 12,784 & 10,987 \\ 4,713 & - \\ \hline 28,909 & 24,618 \\ \hline 88,409 & 94,118 \\ \hline \end{tabular} Liabilities and equity Current liabilities as Bank overdraft Trade payables Corporation tax Interest payable \begin{tabular}{rr} - & 490 \\ 13,812 & 15,713 \\ 1,800 & 250 \\ 200 & 250 \\ \hline 15,812 & 16,703 \end{tabular} Non-current liabilities Debentures \begin{tabular}{rr} 13,000 & 2,800 \\ \hline 28,812 & 19,503 \\ \hline \end{tabular} Capital and reserves $1 ordinary shares Share premium account Revaluation reserve Retained profits Total liabilities and equity Additional information: 1. During the year, several machines were disposed of for $2,200,000. These machines had a combined original cost of $4,000,000 and had a total net book value of $2,000,000 on the date of disposal. 2. On 1 January 2021, a bonus share was issued to shareholders for every 4 ordinary shares they held. This bonus issue was entirely financed by the available profits. A further share issue was made on the 30 September 2021. 3. Included in the profit before tax was an investment income of $1,250,000 and an interest expense of $510,000. Required: (a) Prepare a cash flow statement for Chamber Corp for the year ended 31 December 2021. (17 marks) (b) Reply to the following questions put to you by one of the directors of the company: 'Can you please explain to me how we have a healthy profit yet our bank overdraft has reached a record level? Surely there must be something wrong with the profit calculations