Question

6. Table 3.1 in Chapter 3 presents financial statements over the period 2014–2017 for R&E Supplies, Inc. a. Construct a sources and uses statement for the company over this period (one statement for all three years). b. What insights, if any, does the sources and uses statement give you about the financial position of R&E Supplies?

Answer 1

Sources of cash Decrease in cash and securities Increase in accrued wages Increase in current portion long term debt Increase in Accounts Payable Increase in retained earning Total $ $ $ $ $ $ 259.00 13.00 40.00 2,205.00 537.00 3,054.00 Uses of cash Increase in accounts receivable Increase in inventory Increase in net fixed assets Decrease in long term debt Increase in prepaid expenses Total $ $ $ $ $ $ 1,543.00 1,148.00 159.00 2,000.00 4.00 3,054.00 Increase in inventory and increase in accounts receivable is nearly 90% of uses of cash and increase in accounts payable is nearly 70% of the sources of cash.