1)The following is a list of amounts taken from the records of Don's Dents, a second-hand car sales yard operating in Taranaki, for the year to 31/12/20X1.

Accounting Fees expense 6,000

Cost of Goods Sold 210,000

Bad Debts 5,000

Buildings (purchased 2001) 120,000

Capital (buildings) contributed by the owner 60,000

Bank Loan (6-month term) obtained from BNZ 120,000

Capital, start 45,000

Cash Drawings 70,000

Cash receipts from customers 410,000

Cash - Bank balance, start of year 3,500in funds

Depreciation - Building 11,000

Discount (from suppliers for prompt payment) 5,000

Discount (to customers for prompt payment)7,000

Dividends revenue 12,000

Dividends received in cash 10,000

Interest expense 23,000

Interest paid 20,000

Interest received in cash 8,000

Interest revenue 9,000

Mortgage obtained from BNZ 35,000

Mortgage part-repayment (principal) 49,000

Payments to Suppliers 270,000

Postage & Stationery expense 2,400

Purchase of shares in Telecom for cash 15,000

Purchase of New Buildings for cash (current year) 160,000

Sale of Toyota shares for cash 75,000

Sale of Old Buildings for cash 55,000

Sales 600,000

Wages expense 78,000

Wages paid 72,000

a)Present a fully classified Cash Flow Statement for the year ending 31 December 20X1. (Note: some items listed are not cash flow items.)

b)Comment on Don's cash flows, in regard to operating, investing and financing activities, the ending cash bank balance, and any items you consider are relevant.

c)Assume Don's net profit on his Income Statement is $210,000. Compare this with the final net operating cash flow for the business, and suggest reasons for the difference.

d)Make 3 recommendations to Don in regard to his cash flows and cash position.

2)The following is a list of amounts taken from the records of Lilly Lavender's, a flower sales and arranging service, for the year to 31/12/20X1.

Advertising expense 21,000

Buildings (purchased 2005) 220,000

Capital (buildings) contributed by the owner 110,000

Capital, start 78,000

Cash invested by Lilly from inheritance 35,000

Cash Drawings 90,000

Cash Receipts from Customers 785,000

Cash - Bank balance, start of year 6,000overdrawn

Commission Revenue 29,000

Commission received in cash 19,000

Cost of Goods Sold 333,000

Depreciation - Building 24,000

Depreciation - Equipment 4,000

Discount (from suppliers for prompt payment) 8,000

Equipment (purchased 2005) 50,500

Interest expense 40,000

Interest paid 35,000

Interest received in cash 14,000

Interest revenue 15,700

Loan (6 months) obtained from ANZ10,000

Loan (6 months) repaid to ANZ 10,000

Mortgage obtained from BNZ 65,000

Mortgage repaid (principal) 165,000

Other operating expenses 34,000

Payments to Suppliers 373,000

Purchase of New Buildings for cash (current year) 280,000

Purchase of shares in Telecom for cash 26,000

Sale of Jones Ltd shares for cash 131,000

Sale of Old Buildings for cash 96,000

Sales 900,000

Tax expense 112,000

Tax paid 123,000

Term Deposit (opened mid-year) 20,000

Wages expense 85,000

Wages paid 80,000

a)Present a fully classified Cash Flow Statement for the year ending 31 December 20X1. (Note: some items listed are not cash flow items.)

b)Comment on Lilly's cash flows, in regard to operating, investing and financing activities, the ending cash bank balance, and any items you consider are relevant.

c)Assume Lilly's net profit on her Income Statement is $240,000. Compare this with the final net operating cash flow for the business, and suggest reasons for the difference.

d)Make 3 recommendations to Lilly in regard to her cash flows and cash position.