Formulas

• Accounting equation: Assets = Liabilities and Owner's Equity
• Current ratio: current assets/current liabilities
• Acid test ratio: (current assets - inventory)/current liabilities
• Return on equity: net income/total shareholder's equity

• Sources of Cash (Year Over Year) Assets - (decrease) Liabilities + (increase) Owner's Equity + (increase)
• Uses of Cash (Year Over Year) Assets + (increase) Liabilities - (decrease) Owner's Equity - (decrease)

QUESTION

Prepare a Sources and Uses of Cash Statement for the Pike Tuition Reimbursement Services Company from Year 1 through Year 2. (Please make sure you list the total sources and total uses.)

Pike Tuition Reimbursement Services Company - Years 1 and 2 Balance Sheet Excerpts:

ACCOUNT	YEAR 1	YEAR 2
Cash	175,000	188,000
Accounts Receivable	100,000	14,000
Supplies	120,000	165,000
Prepaid Expenses	12,000	93,000
Fixed Assets	335,000	405,000
Accounts Payable	70,000	86,000
Salaries Payable	87,000	67,000
Long-term Debt	275,000	335,000
Owner's Equity	310,000	377,000