The following information is available for Zonka Limited.

The balance in the bank account of the business at 1 January 2017 was £30,000 overdrawn. During January 2017 the following transactions took place:

● New shares were issued by the company which raised an additional £100,000.

● Land was purchased for £60,000.

● A loan of £30,000 was taken out from a lender.

● Inventory was bought for £12,000 in cash.

● The inventory was sold for £27,000 in cash.

● £7,000 was paid for rent for the year.

● £6,000 was paid to the tax authorities to settle last year’s tax liability.

● Half of the loan was repaid: £15,000.

● A motor vehicle was purchased for £1,500 on credit from Spring Ltd and will be paid for in February.

● Interest expense of £3,000 was paid on the loan.

● £17,000 was paid for consultant fees.

Required:

(a) Prepare a statement of cash flows for Zonka Limited for the month ended 31 January 2017, including the reconciliation between opening and closing bank balance. 

(b) Outline what it tells the managers of Zonka Limited.