Create Ternan plc’s appropriation account and balance sheet using the information provided.

After preparing the Trading, Profit and Loss Accounts, Ternan Plc presented the following financial data as of March 31, 2013.
£000 Net Profit 56 Hardware 230 VAT (CR) Unappropriated Profit as of April 1, 2012 was 16. 28 borrowers Preference Dividend Interim 40 2 Debtors 22 Debentures at 5% ten Stock as of March 31, 2013, 130 Bank 10% Preference Shares (80,000) of the 50 Issued Share Capital 80 Common Shares (20 000) 200 Reserve for Doubtful Accounts 6 Prepaid Insurance 8 Equipment Depreciation Provision 26 Rent Due Due 5 Debenture Interest 1
The Board of Directors recommended that (a) Ternan plc’s Appropriation Account and Balance Sheet be prepared using the aforementioned information. (b) The Preference Share dividend should be paid in full.
(a) Ternan Plc provides trade and Cash Discounts. Describe one advantage of each to the business.
(c) Describe the distinction between bad debts and a provision for them.
(d) A profitable company may experience issues with cash flow. Give two potential causes for this to happen.