Alpha Unlimited, Inc.

End-of-Year Balance Sheets

2022 2021 2020

cash 2,000,000 2,100,000 2,050,000

accounts receivable 5,500,000 6,275,000 6,873,000

inventories 4,000,000 4,750,000 5,100,000

current assets 11,500,000 13,125,000 14,023,000

gross fixed assets 25,000,000 26,780,000 26,780,000

accumulated depreciation 900,000 950,000 1,000,000

net fixed assets 24,100,000 25,830,000 25,780,000

total assets 35,600,000 38,955,000 39,803,000

accounts payable 3,500,000 3,750,000 4,000,000

accruals 2,000,000 2,250,000 2,500,000

current liabilities 5,500,000 6,000,000 6,500,000

long-term bonds 12,000,000 13,500,000 13,500,000

common stock 2,000,000 2,000,000 2,000,000

paid-in capital 5,000,000 5,000,000 5,000,000

retained earnings 11,100,000 12,455,000 12,803,000

total liabilities & equity 35,600,000 38,955,000 39,803,000

Alpha Unlimited, Inc.

Income Statements

2022 2021 2020

sales 98,000,000 125,500,000 126,000,000

cost of goods sold 86,000,000 108,500,000 110,000,000

depreciation expense 50,000 50,000 50,000

EBIT 11,950,000 16,950,000 15,950,000

interest expense 1,440,000 1,620,000 1,620,000

EBT 10,510,000 15,330,000 14,330,000

taxes @ 40% 4,204,000 6,132,000 5,732,000

NI 6,306,000 9,198,000 8,598,000

cash dividends 5,433,921 8,443,000 8,250,000

Assume that you are using the above information to prepare a Statement of Cash Flows for 2022. Which of the following is/are true of long-term bonds?

	A.	Long-term bonds are a source of funds in the amount of $1,500,000.
	B.	Long-term bonds are a use of funds in the amount of $1,500,000.
	C.	Long-term bonds are a source of funds in the amount of $13,500,000.
	D.	Long-term bonds are neither a source nor a use because the amount did not change from 2021 to 2022.
	E.	None of the above is true.