Items to be included in the Mitchell’s Mechanics business’s cash flow statement for the current year are as follows:

i Investment by owner: $12 000 ii Payments to employees: $32 400 iii Receipt from sale of investments: $5200 iv Ending cash balance: $29 200 v Payments for inventory: $24 000 vi Cash collected from customers: 69 600 vii Withdrawals by owner: $7200 viii Payment for purchase of warehouse: $36 800 ix Payment of interest: $2000.

Required:

a Prepare the business’s cash flow statement.

b If the average owner’s equity was $62 000, calculate the business’s cash return on owner’s equity. What is your evaluation if last year the business’s cash return was 17.2 per cent?