Refer to the Pier 1 Imports financial statements in Appendix B at the end of this book.

1. Focus on Cash, Including Temporary Investments (this is the same as cash and cash equivalents). Why did cash change during 2006? The statement of cash flows holds the answer to this question. Analyze the 7 largest individual items on the statement of cash flows (not the summary subtotals such as "net cash provided by operating activities"). For each of the 7 individual items, state how Pier 1's action affected cash. Show amounts in millions and round to the nearest 1/10 of $1 million. (Challenge)

2. Pier 1's Report of Management describes the company's internal controls. Show how the management report corresponds to 2 of the 4 elements in the definition of internal control. (Challenge)