The question I am attempting is here:

http://www.cl.cam.ac.uk/tripos/y2002p2q3.pdf

I think I have part (a) and (b) right -

a) The system has 8 states

b) The state transition table will have 8 rows (one for each state)

However.. Parts (c) and (d) have confused me ,

I dont know how to go from the circuit diagram to the state transition table!

So far I gather the table needs 3 columns; Present State, Next State and Output - but I dont know which parts of the input/output values to put into the columns..

Then it asks me to draw the state diagram.. but if I am right in saying there are 8 states.. surely thats going to be one very complicated diagram with 8 circles and several connections between each of them for the transitions!

I would really appreciate any guidance you guys could offer me, thanks!