For the years 2001-2002, the financial statements of XYZ Company are given in Tables 7.11 and 7.12. Prepare a funds flow statement that delineates the sources and applications of funds for the XYZ Company during 2001 and 2002.

TABLE 7.11 XYZ Balance Sheet (thousands of dollars) 2002 (dollars) 2001 (dollars) Assets Cash Marketable securities Accounts receivable Inventories 18.500 0 39,500 98,000 17.000 5,000 28.500 113.000 Total current assets 156,000 163.500 Plant and equipment (net) Other assets 275,000 3,000 290.000 8.000 Total assets 434,000 461,500 Liabilities Accounts payable Notes payable Accrued expanses 34,500 20,000 18,500 18,000 25,000 11.500 Total current liabilities 73,000 54.500 Mortgage payable Common stock Earned surplus 20.000 200,000 141.000 30.000 200.000 177.000 Total liabilities and equities 434.000 461.500 TABLE 7.12 XYZ Income Statement (thousands of dollars) 2002 (dollars) 2001 (dollars) Sales Cost of sales * 330,000 265,000 395,000 280,000 Gross profit 65,000 115,000 Selling and administrative Other expenses Interest 95,000 4,000 2,000 88,000 3,500 3,000 Profit before taxes Federal income tax (36,000) 0 20,500 10,000 10,500 Net income (loss)** (36,000) * Includes depreciation of $15,500 in 2001 and $15,000 in 2002 **No dividends paid in 2002