Complete the statement of sources and uses of cash from the following entries:

Net income	$ 1,900
Dividends	700
Additions to inventory	160
Additions to receivables	190
Depreciation	130
Reduction in payables	590
Net issuance of long-term debt	340
Sale of fixed assets	100


The "Statement of Sources and Uses of Cash" typically outlines how cash is generated (sources) and how it's used (uses) during a specific period. Here, we need to classify each of the provided entries as either a **source** (cash inflows) or a **use** (cash outflows) and then calculate the net cash flow.

### Sources of Cash (Inflow):
1. **Net Income**: $1,900 (net profit adds cash)
2. **Depreciation**: $130 (non-cash expense, added back to cash)
3. **Net Issuance of Long-Term Debt**: $340 (borrowed money increases cash)
4. **Sale of Fixed Assets**: $100 (sale of assets increases cash)

**Total Sources of Cash = $1,900 + $130 + $340 + $100 = $2,470**

### Uses of Cash (Outflow):
1. **Dividends**: $700 (cash paid to shareholders)
2. **Additions to Inventory**: $160 (increase in inventory uses cash)
3. **Additions to Receivables**: $190 (more receivables reduce cash)
4. **Reduction in Payables**: $590 (paying off liabilities decreases cash)

**Total Uses of Cash = $700 + $160 + $190 + $590 = $1,640**

### Net Change in Cash:
**Net Cash Flow = Total Sources - Total Uses**
\[
\text{Net Cash Flow} = 2,470 - 1,640 = 830
\]
Thus, the net increase in cash is **$830**.

Would you like further details or have any questions about this?

Here are five related questions for further exploration:
1. How is depreciation treated in a cash flow statement?
2. What is the impact of changes in working capital on cash flow?
3. Why are dividends classified as a use of cash?
4. How does the sale of fixed assets affect the cash flow statement?
5. What are the differences between operating, investing, and financing cash flows?

**Tip:** In cash flow analysis, non-cash expenses like depreciation are added back since they reduce net income but don't actually consume cash.

Complete the statement of sources and uses of cash from the following entries: Net income $1,900, Dividends $700, Additions to inventory $160, Additions to receivables $190, Depreciation $130, Reduction in payables $590, Net issuance of long-term debt $340, Sale of fixed assets $100

Learn how to complete the statement of sources and uses of cash with a detailed example. This problem covers key concepts in cash flow analysis, including net income, dividends, depreciation, and changes in working capital. Suitable for finance and accounting students.

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