The following information has been taken from Liam's accounts. Income Statement for the year ending 30th September 2019. Revenue Cost of Sales Gross Profit Selling and distribution expenses (excluding depreciation) Administration expenses (excluding depreciation) Operating expenses Depreciation Operating Profit Interest receivable Interest payable Profit before taxation Taxation Profit after taxation 320,000 (156,000) 164,000 (56,000) (35,000) (34,000) (15,200) 23,800 5,000 (4,786) 24,014 (13,000) 11,014 Statements of financial position as at 30th September 2018 and 30th September 2019. 2018 2019 Fixed Assets 80,000 92,000 Plant at cost Accumulated depreciation (27,000) (35,000) Plant - Net Book 53,000 57,000 Value Motor Vans - cost 23,000 40,000 Accumulated (15,600) (22,800) depreciation Motor vans - Net 7,400 17,200 book value 60,400 74,200 Current Assets Inventory 27,000 44,100 25,250 Trade receivables 10,900 52,150 Bank Current liabilities Trade payables Taxation (16,000) (12,600) Bank overdraft Net current assets 38,664 Non-current liabilities 12% debentures (30,000) 82,864 Capital and Reserves Capital Reserves 82,864 20,000 51,850 61,450 (50,000) 71,850 71,850 I (8,086) (12,600) (10,000) 20,000 62,864 Additional information 1. There were no share issues for cash during the period. 2. There were no dividends paid during the period." Required: a) "Prepare Liam's cashflow statement using the indirect method for the year ending 30th September 2019, showing clearly how cash and cash equivalents changed during the year." [25 marks] b) "State some of the possible reasons that led Liam to experience a decrease in cash even when the company earned profit during the period. (Maximum word count: 200 words)" [10 marks] Total [35 marks]