Question

Below are the most recent balance sheets for Country Kettles, Inc. Excluding accumulated depreciation, determine whether each item is a source or a use of cash, and the amount (Input all amounts as positive values):

COUNTRY KETTLES, INC. Balance Sheet December 31, 2011
	2010			2011
Assets
Cash	$	32,400		$	31,690
Accounts receivable		71,900			75,280
Inventories		62,800			65,375
Property, plant, and equipment		167,000			179,800
Less: Accumulated depreciation		47,520			51,900
Total assets	$	286,580		$	300,245
Liabilities and Equity
Accounts payable	$	46,900		$	49,190
Accrued expenses		8,280			7,220
Long-term debt		27,600			31,000
Common stock		36,000			42,000
Accumulated retained earnings	$	167,800		$	170,835
Total liabilities and equity	$	286,580		$	300,245

Item	Source/Use		Amount
Cash	(Click to select)UseSource	$
Accounts receivable	(Click to select)UseSource	$
Inventories	(Click to select)SourceUse	$
Property, plant, and equipment	(Click to select)UseSource	$
Accounts payable	(Click to select)SourceUse	$
Accrued expenses	(Click to select)UseSource	$
Long-term debt	(Click to select)SourceUse	$
Common stock	(Click to select)SourceUse	$
Accumulated retained earnings	(Click to select)SourceUse	$

Answer 1

We will identify the change from previous year to current year for the given items. For asset items (excluding cash), an increase from previous year to current year indicates use of cash (as cash is spent in acquiring the assets) and decrease will indicate source of cash (as cash is coming in the business). For liabilities items, an increase will indicate source of cash (as cash is borrowed and liabilities are increasing) and decrease will indicate use of cash (as repayment is being done for liabilities). For cash, an increase will indicate source of cash and decrease will indicate use of cash.

Table is given below:

Description	Source / Use	Amount
Cash	Use of cash	710
Accounts receivable	Use of cash	3380
Inventories	Use of cash	2575
Property, plant & equipment	Use of cash	12800
Accounts payable	Source of cash	2290
Accrued expenses	Use of cash	1060
Long term debt	Source of cash	3400
Common stock	Source of cash	6000
Accumulated retained earnings	Source of cash	3035