You are presented with the following information:

Starter commenced business on 1 April 2011.

Required:
(a) Compile Starter's cash flow statement for the year ended 31 March 2012.
(b) What does it tell the owners ofStarter?

Starter Profit and loss account for the year to 31 March 2012 Sales Purchases Less: Closing stock Gross profit Less Depreciation Net profit for the year 10000 5000 1000 4000 6000 2000 4000 Balance sheet at 31 March 2012 Van 10000 2000 8000 Less: Depreciation Stock Trade debtors Bank 1000 5000 12 500 18500 2500 Less: Trade creditors 6000 24000 Capital Add: Net profit for the year 20000 4000 24000