a) Cyber56 Ltd is an IT company providing Industry 4.0 solutions to various organisations.

Question

The company is based in a £200,000 building. Cyber56 borrowed £150,000 from a bank to expand its products. The company holds £50,000 in cash at bank and has debtors worth £60,000. The company also recorded accumulated depreciation of £15,000 and has £50,000 worth of computers. The company owes £25,000 to its suppliers and made a net profit of £20,000 last year.
Making relevant assumptions about income and expenses, prepare the following two documents for Cyber56:
i) Profit and loss account

ii) Balance sheet.

b) Explain the purpose of a cash flow statement and its importance.

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