Turbulent mixing of cloud and clear air is modeled in three dimensions with centimeter and half centimeter resolution in order to investigate smallest scales of turbulent motions. It is assumed that at these scales no subgrtd TKE parameterization is necessary and dynamical setup of the model is similar to DNS simulations with decaying turbulence. Three series of numerical experiments are conducted: one with bulk parameterizadtion of liquid water, second with detailed microphysics with sixteen classes of cloud droplets accounting for droplet sedimentation in each class, and third reference run with cloud water as a passive scalar. In each series three experiments with low, moderate and high level of initial TKE are performed. Results indicate that evaporative cooling durning turbulent mixing dramatically influences TKE evolution and the whole dynamics of mixing in cases of low and moderate initial TKE values, same influenke in case of high inital TKE is also observed. Droplet sedimentation seems to be important in the case ow low TKE, its role at higher initial values of TKE is less important.