Below is is the comparative balance sheet of Svobada Corp ( in millions ) Prepar

Question

Below is is the comparative balance sheet of Svobada Corp ( in millions )

Prepare a flow of funds (sources and uses of funds) statement for 20X2 for the Svoboda Corporation.

LIABILITIES AND SHAREHOLDERS' EQUITY Notes payable Accounts payable Accrued wages Accrued taxes Long-term debt Common stock Retained earnings 20X1 $20 20X2 ASSETS Cash Accounts receivable Inventories Fixed assets, net Other assets 20X1 20X2 15 12 50 15 15 26 20 40 Total liabilities and Total assets $90 $100 shareholders' equity $90 $100 Svoboda Corporation statement of income and retained earnings, year ended December 31, 20X2 (in millions) Net sales $48 enses Cost of goods sold Selling, general, and administrative expenses Depreciation Interest $25 37 $11 4 Less: Taxes Add: Retained earnings at 12/31/Xl Less: Dividends Net income before taxes Net income Subtotal Retained earnings at 12/31/X2 40 $47 $44

Explanation / Answer

Svoboda Corporation All Amounts in $ million Fund Flow Statement (Sources and Utilisation of Funds) Sources of Funds Utilisation of Funds Opening Fund Balance 5 Increase in Net Working Capital 22 Operating Income 18 Purchase of Fixed Assets 10 Issue of Long Term Debt 15 Payment of Interest 2 Issue of Common Stock 6 Payment of Income Tax 4 Payment of Dividends 3 Closing Fund Balance 3 44 44 Working of Operating Income Net Income per Income Statement 7 Add : Depreciation 5 Add : Interest 2 Add : Income Tax 4 Operating Income 18 Increase/(Decrease) in Net Working Capital 20X1 20X2 Variation Current Assets Accounts Receivable 15 22 7 Other Assets 8 5 -3 Inventories 12 15 3 Total 35 42 7 Less : Current Liabilities Notes Payable 20 0 -20 Accounts Payable 5 8 3 Accrued Wages 2 2 0 Accrued Taxes 3 5 2 Total 30 15 -15 Increase in Net Working Capital 22

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