Examine the information presented below for Perfect Fit Clothing Stores first year of business. The Vice President of Sales claims the organization had a fabulous first year based on the SCF. The Controller disagrees noting this year was an operating failure and the statement was incorrectly presented with the $109,000 not representing an actual increase in cash. In your initial post, note who you agree with providing explanations to support your position. In your replies, note any errors presented and analyze the format of the SCF as presented.

Perfect Fit Clothing

Statement of Cash Flows

For the Period Ended December 31, 2016

Sources of Cash

Sale of clothing $382,000

Sale of Capital Stock 380,000

Sale of Investment 120,000

Depreciation 80,000

Issuance of Note for Truck 30,000

Interest on Investments 8,000

Total Sources of Cash $1,000,000

Uses of Cash

Purchase of Furniture and Fixtures $330,000

Purchase of Merchandise (for resale) 253,000

Operating Expenses (includes depreciation) 170,000

Purchase of Investment 95,000

Purchase of Truck with a Note 30,000

Purchase of Treasury Stock 3,000

Total Uses of Cash $891,000

Net Increase in Cash $109,000