Provide the solution to problem 3a and 3b Explain how you arrived at your solution so that your fellow classmates can understand your methodology.

3. Financial statements for the Begalla Corporation follow. Begalla Corporation comparative balance sheets at December 31 (in millions)

ASSETS 20X1 20X2

Cash $4 $5 Accounts receivable 7 10 Inventory 12 15

LIABILITIES

Accounts payable Notes payable Accrued wages Accrued taxes

Total current liabilities Long-term debt Common stock Retained earnings

20X1 20X2

$ 8 $10 5 5 2 3 3 2

$18 $20 20 20 10 10 15 20

$63 $70

$95

70 $25 10 $15

Total current assets Net fixed assets

$23 $30 40 40

$63 $70

Total

Total

Begalla Corporation income statement 20X2 (in millions)

Sales Cost of goods sold Selling, general, and administrative expenses Depreciation Interest

Net income before taxes Taxes

Net income

$50 15 3 2

a. Prepare a sources and uses of funds statement for Begalla Corporation.

b. Prepare a cash flow statement using the i