Question: Prepare a sources and uses of funds statement for Begalla Corporation.
ID: 2727281 • Letter: Q
Question
Question: Prepare a sources and uses of funds statement for Begalla Corporation.
2. Financial statements for the Begalla Corporation follow Begalla Corporation comparative balance sheets at December 31 (in millions) ASSETS Cash Accounts receivable Inventory 20X1 20X2 $ 5 10 15 20X 20X2 $10 LIABILITIES Accounts payable Notes payable Accrued wages Accrued taxes 12 $20 20 10 20 $70 Total current assets Net fixed assets $18 20 10 15 $63 $23 40 Total current liabilities $30 40 Long-term debt Common stock Retained earnings Total $63 $70 Total Begalla Corporation income statement 20X2 (in millions) $95 Sales Cost of goods sold Selling, general, and administrative expenses Depreciation Interest $50 15 70 $25 10 $15 Net income before taxes Taxes Net income Prepare a sources and uses of funds statement for Begalla Corporation.Explanation / Answer
Statement of Sources and Uses
_________________________________________________________________________
Sources Million $ Uses Million $
Funds from Operations Payment of dividend 10
Net Profit 15 Purchase of fixed asset 3
Depreciaiton 3 18 Increase in cash & cash equivalents 1
Increase in accounts payable 2 Increase in accounts receivable 3
Increase in accrued wages 1 Increase in inventory 3
Decreae in accrued taxes 1
Total 21 Total 21
Note:
Purchase of fixed assets = Closing balance + depreciaiton - opening balance = 40 + 3 - 40 = 3
Dividend paid = Begining balacne of Retianed earnings + Net income - Closing balance of net income
= 15 + 15 - 20 = 10
Note: Dividend should not be added to Net profit as it is not deducted in the income statement
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