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Funds Type Statements

 Self-Paced Overview

Classifying Changes

Example of Classifying Changes

In the Funds Statement example below, the cash account goes from $20,000 on the first, Beginning Balance Sheet to $5,000 on the second, Ending Balance Sheet. That is a decrease of $15,000. A decrease in an asset item is a source of funds. Other changes would be classified accordingly.

Funds Statement - Step 1

Beginning Balance Sheet
Products, Inc.
Assets   Claims
Cash $20,000   Accounts Payable $10,000
Marketable Securities $10,000   Accruals $4,000
Receivables $50,000   Notes Payable $24,000
Inventories $70,000   Long-Term Debt $96,000
Fixed Assets $160,000   Common Stock $64,000
  Retained Earnings $112,000
Total Assets $310,000   Total Claims $310,000
Ending Balance Sheet
Products, Inc.
Assets   Claims
Cash $5,000   Accounts Payable $10,000
Marketable Securities $10,000   Accruals $4,000
Receivables $5,145   Notes Payable $0
Inventories $32,250   Long-Term Debt $2,720
Fixed Assets $172,000   Common Stock $64,000
  Retained Earnings $143,675
Total Assets $224,395   Total Claims $224,395

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