The Fred Proffet Company has been in the contract food service management business for many years. Their clients choose the Proffet Company for its crcativity and attention to detail. Allisha McKay is the person who prepares the summary of sources and uses of funds for the Proffet Company. Help her do that by using the balance sheets that follow to calculate the company's sources and uses of funds, using arrows to indicate the differences where appropriate, and then answer the questions that follow. The Fred Proffet Company Balance Sheets December 31, Last Year and This Year Last Year ($) This Year ($) Sources Uses ASSETS Current Assets Cash 336,000 350,000 Marketable Securities 1,240,000 1,200,000 Net Receivables 1,520,000 1,550,000 Inventories 844,000 830,000 Total Current Assets 3,940,000 3,930,000 Property and Equipment 1,200,000 1,500,000 Less Accumulated 420,000 525,000 Depreciation Net Property and 780,000 975,000 Equipment TOTAL ASSETS 4,720,000 4,905,000 LIABILITIES AND OWNERS EQUITY Current Liabilities Accounts Payable 584,000 565,000 Notes Payable 134,000 90,000 Other Current Liabilities 636,000 300,000 Total Current 1,354,000 955,000 Liabilities Long-Term Liabilities Long-Term Debt 720,000 1,100,000 Total Liabilities 2,074,000 2,055,000 Owners' Equity Common Stock 300,000 320,000 Paid in Capital 1,200,000 1,280,000 Retained Earnings 1,146,000 1,250,000 Total Owners' Equity 2,646,000 2,850,000 TOTAL LIABILITIES AND 4,720,000 4.905,000 OWNERS' EQUITY TOTAL SOURCES AND USES OF FUNDS a. Did the change in cash reflect a source or a use of funds? What was the amount of that change? b. Did the change in net receivables reflect a source or a use of funds? What was the amount of that change? c. Did the change in notes payable reflect a source or a use of funds? What was the amount of that change? d. Did the change in retained earnings reflect a source or a use of funds? What was the amount of that change? e. What was the total amount of sources and uses of funds? 4. Now that Allisha McKay (see Question 3) has compiled the sources and uses of funds information she needs, she is ready to prepare The Fred Proffet Company's SCF for this year. Help her complete the company's SCF by using the information taken from the following Condensed Income Statement and Statement of Retained Earnings for This Year, as well as This Year and Last Year's Balance Sheets shown in the previous Question 3. Then, answer the questions that follow: The Fred Proffet Company Condensed Income Statement and Statement of Retained Earnings For the Period: January 1 through December 31, This Year SALES $5,200,000 Cost of Sales 1,560,000 Labor 1,456,000 PRIME COSTS 3,016,000 Other Operating Expenses (excluding depreciation) Depreciation 1,404,000 105,000 OPERATING INCOME 675,000 Interest 242,000 INCOME BEFORE INCOME TAXES 433,000 Income Taxes 173,000 NET INCOME 260,000 STATEMENT OF RETAINED EARNINGS Retained Earnings, December 31, Last Year 1,146,000 Net Income for This Year 260,000 Subtotal 1,406,000 Cash Dividends Paid This Year 156,000 Retained Earnings, December 31, This Year $1,250,000 The Fred Proffet Company Statement of Cash Flows December 31, This Year NET CASH FLOW FROM OPERATING ACTIVITIES Net Income Adjustments to reconcile net income to net cash flows from operating activities Depreciation Increase in Net Receivables Decrease in Inventories Decrease in Accounts Payable Decrease in Other Current Liabilities Net Cash Flow from Operating Activities NET CASH FLOW FROM INVESTING ACTIVITIES Decrease in Marketable Securities Increase in Property and Equipment Net Cash Flow from Investing Activities (continued) (Continued) NET CASH FLOW FROM FINANCING ACTIVITIES Decrease in Notes Payable Increase in Long-Term Debt Increase in Capital Stock (Common Stock + Paid in Capital) Dividends Paid Net Cash Flow from Financing Activities Net Increase in Cash This Year Cash at the beginning of This Year Cash at the end of This Year SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION Cash paid during the year for Interest Income Taxes a. What is Allisha's proper entry for "Net Cash Flow from Operating Activities"? b. What is Allisha's proper entry for "Net Cash Flow from Investing Activities"? c. What is Allisha's proper entry for "Net Cash Flow from Financing Activities"? d. What is Allisha's proper entry for "Net Increase in Cash This Year"? e. Since all changes in cash are accounted for in the SCF, what is the purpose of the "Supplementary Disclosure of Cash Flow Information" portion of the statement?