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The following are the summarised accounts of Pearl Ltd for the two years ended 31...

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Accounting

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The following are the summarised accounts of Pearl Ltd for the two years ended 31 December 2020 Summary of income statement for the year ended 31 December 2021 The following information is available: (1) An asset was disposed of for sale proceeds of $12,000 with the gain/loss on disposal included as part of expenses in the income statement. The cost of asset sold was $18,500 and its net book value was $13,000. (2) Included in the profit before tax is the investment income of $100 and interest expense of $375. (3) The investments are shares held in another company. The increase from 2020 to 2021 is the cost of additional shares purchased during the year. (4) A bonus issue of 1-for-4 was made on ordinary shares on 1 January 2021. The bonus issue was made by utilising all of the share premium and the balance by capitalising retained earnings. There was a further issue of shares at a premium for cash consideration on 30 June 2021. (5) An interim dividend was paid in June 2021. Required: (a) Prepare a cash flow statement for Pearl Ltd for the year ended 31 December 2021. (15 marks) (b) Evaluate Pearl Ltd's cash flow position. (Your answers should ONLY be about 1/2 page 3/4 page.)

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