5. Which of the following best describes Carter's sources and uses of cash?

getting cash mostly from debentures (debt) and using it mostly for fixed assets

getting cash mostly from debentures (debt) and using it mostly for dividends

getting cash mostly from accumulated depreciation and using it mostly for inventory

getting cash from mostly from sales and using it mostly for dividends

Table 5-2 Assets Cash Marketable Securities Accounts Receivable Inventories Total Current Assets Carter Chemical Company: Balance Sheet as of December 31 (Millions of Dollars) 2012 2011 Liabilities and Equity 50 55 Accounts Payable 0 25 Notes Payable 350 315 Accrued Wages 300 215 Accrued Income Taxes 700 610 Total Current Liabilities Gross Fixed Assets Gross Accumulated Depreciation Net Fixed Assets 1,800 500 1,300 1,470 400 1,070 Total Assets 2,000 1,680 Table 5-1 Carter Chemical Company Income Statement for Year Ending December 31 (Millions of Dollars, Except perShare Date) First Mortgage Bonds Debentures Total Long-Term Debt Stockholders Equity Common Stock (50,000,000 shares, $1 par) Paid-In Capital Retained Earnings Total Stockholders' Equity (Common Net Worth) Total Liabilities and Equity Net Sales Less: Cost of goods sold Gross profit Less: Other operating expenses Depreciationi Selling General and administrative Lease payments on buildings Earnings before interest and axes (EBIT) Less: Interest expense Interest on notes payable Interest on first mortgage bonds Interest on debentures Earnings before taxes (EBT) Less: Federal and state taxes (40%) Net income available ot common stockholders Dollars) 2012 60 100 10 130 300 2011 30 60 10 120 220 500 300 800 520 60 580 50 100 750 900 2,000 50 100 730 880 1,680 2012 3000 2544 456 2011 2850 2413 437 100 22 40 28 266 90 20 35 28 264 8 40 18 2 42 3 200 80 120 217 87 130