(a) From the following Balance Sheets prepare a Statement of Source and Application of Funds for Year 2.

(b) What conclusions do you draw from your Statement of Source and Application of Funds and what assumptions have you made?

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Share Capital (1 shares) Revaluation Reserve General Reserve Share Premium Balance Sheets Year 1 Year 2 140 000 20 000 192.000 Fixed Assets 24 000 34 000 8 000 Plant & Equipment Less depreciation (at cost) Year 1 Year 2 102 800 140 600 16 800 28 600 86.000 112 000