Spettel Corporation's comparative balance sheet appears below: The company's net income (loss) for the year was $11,000 and its cash dividends were $2,000.
-Which of the following classifications of changes in balance sheet accounts as sources and uses is correct?
A) The change in Property, Plant, and Equipment is a source; The change in Long-Term Debt is a source
B) The change in Property, Plant, and Equipment is a use; The change in Long-Term Debt is a source
C) The change in Property, Plant, and Equipment is a source; The change in Long-Term Debt is a use
D) The change in Property, Plant, and Equipment is a use; The change in Long-Term Debt is a use

Question

Spettel Corporation's comparative balance sheet appears below:  The company's net income (loss) for the year was $11,000 and its cash dividends were $2,000.
-Which of the following classifications of changes in balance sheet accounts as sources and uses is correct?
A) The change in Property, Plant, and Equipment is a source; The change in Long-Term Debt is a source 
B) The change in Property, Plant, and Equipment is a use; The change in Long-Term Debt is a source 
C) The change in Property, Plant, and Equipment is a source; The change in Long-Term Debt is a use 
D) The change in Property, Plant, and Equipment is a use; The change in Long-Term Debt is a use

Quizplus · Accepted Answer

Purchasing Property, Plant, and Equipment is a use of funds, while issuing Long-Term Debt is a source of funds.

Spettel Corporation's Comparative Balance Sheet Appears Below: the Company's