Question

Using the attached information to develop and complete a Sources and Uses of Net Working Capital Statement below. The Change in the Net Working Capital Year Current Assets - Current Liabilities - Net Working Capital 2016 2017 Change in Net Working Capital The Sources and Uses of Net Working Capital Sources of NWC Uses of NWC Profits (Retained Earnings) S Payment of dividends Sales of fixed assets Purchase of fixed assets Sales of investments Purchase of investments Long-term loans taken out Repayment of long-term loans Sales of stock Retirement of stock Depreciation Total sources Total uses Total Sources - Total Uses = The Changes within Current Assets and Current Liabilities Change in Current Assets Changes in Current Liabilities Cash/Checking Acct. Accounts Payable Accounts Receivables Taxes Payable Inventories Installment on long-term debt Other current assets due this year Net Change in Net Change in Current Assets Current Liabilities Change in NWC =

Answer 1

Hello,

Year	Current assets	Current liabilities	Net working capital
2016	2,05,000	41,500	1,63,500
2017	2,01,452	55,302	1,46,150
	Change in net working capital		17,350

The sources and uses of net working capital
Sources of NWC		Uses of NWC
Profits (retained earnings)	20,000	Payment of dividends	-	A
Sale of fixed assets	-	Purchase of fixed assets	50,000	B
Sale of investments	-	Purchase of investments	2,350	C
Long term loans taken out	5,000	Repayment of long term loans	-	D
Sales of stock	-	Retirement of stock	-
Depreciation	10,000			E
Total sources	35,000	Total uses	52,350
	Total sources - Total uses		-17,350
Changes within Current Assets and Current Liabilities
Change in Current Assets		Change in Current Liabilities
Cash/Checking account	-1,048	Accounts payable	7,845	F
Accounts receivable	-2,500	Taxes payable	5,957	G
Inventories	-	Installment on long-term debt due this year	-
Other current assets	-
Net change in current assets	-3,548	Net change in current liabilities	13,802
		Change in NWC	-17,350

Explanations
A	50,000-30,000	(Difference between net income of 2016 and 2017)
B	550,000-500,000
C	26,750-24,400
D	306,600-301,600
E	160,000-150,000
F	Cash = 47,952-49,000
	Accounts payable = 27,845-20,000
G	Accounts receivable = 2,500-5,000
	Taxes payable = 7,457-1,500

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