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Formulas Accounting equation: Assets = Liabilities and Owner's Equity Current ratio: current assets/current liabilities Acid test ratio: (current assets - inventory)/current liabilities Return on equity:
Formulas
- Accounting equation: Assets = Liabilities and Owner's Equity
- Current ratio: current assets/current liabilities
- Acid test ratio: (current assets - inventory)/current liabilities
- Return on equity: net income/total shareholder's equity
- Sources of Cash (Year Over Year) Assets - (decrease) Liabilities + (increase) Owner's Equity + (increase)
- Uses of Cash (Year Over Year) Assets + (increase) Liabilities - (decrease) Owner's Equity - (decrease)
QUESTION
Prepare a Sources and Uses of Cash Statement for the Pike Tuition Reimbursement Services Company from Year 1 through Year 2. (Please make sure you list the total sources and total uses.)
Pike Tuition Reimbursement Services Company - Years 1 and 2 Balance Sheet Excerpts:
| ACCOUNT | YEAR 1 | YEAR 2 |
| Cash | 175,000 | 188,000 |
| Accounts Receivable | 100,000 | 14,000 |
| Supplies | 120,000 | 165,000 |
| Prepaid Expenses | 12,000 | 93,000 |
| Fixed Assets | 335,000 | 405,000 |
| Accounts Payable | 70,000 | 86,000 |
| Salaries Payable | 87,000 | 67,000 |
| Long-term Debt | 275,000 | 335,000 |
| Owner's Equity | 310,000 | 377,000 |
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