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 Sheets 2016 2017 Assets Cash $ 30,700 $ 29,820 Accounts receivable 70,200 73,240 Inventories 61,100 63,250 Property, plant, and equipment 150,000 159,400 Less: Accumulated depreciation 46,160 50,200 Total assets $ 265,840 $ 275,510 Liabilities and Equity Accounts payable $ 45,200 $ 47,320 Accrued expenses 6,580 5,860 Long-term debt 25,900 28,450 Common stock 19,000 23,300 Accumulated retained earnings 169,160 170,580 Total liabilities and equity $ 265,840 $ 275,510

Answer 1

Statement showing use or source of cash

Item	Source/Use	Amount	Explanation
Cash	Source	880
Accounts receivable	Use	3040	Increase in current asset = decrease in cash i.e use of cash
Inventories	Use	2,150	Increase in current asset = decrease in cash i.e use of cash
Property, plant, and equipment	Use	5,360	Increase in fixed asset measn asset must be purchased i.e use of cash (Note 1)
Accounts payable	Source	2,120	Increase in current liability = Increase in cash i.e source of cash
Accrued expenses	Use	720	Decrease in current liability = decrease in cash i.e use of cash
Long-term debt	Source	2,550	Increase in long term debt indicates borrowings of funds, means source of funds
Common stock	Source	4,300	Increase in stock means funds raised through stock hence source of funds
Accumulated retained earnings	Source	1,420	Increase in accumulated earnings means increase in cash

Note 1)

Increase in fixed asset

Particulars	2016	2017	Increase in fixed asset
Gross block	150000	159400
Accumulated depreciation	46160	50200
Net Block	103840	109200	5,360