For each account on this company’s balance sheet, show the change in the account during 2015 and note whether this change was asource or use of cash. Do your numbers add up and make sense? Explain your answer for total assets as compared to your answer for total liabilities and owners’ equity.

Cash: Sources of cash include income from sales, investments, and loans as well as payments made to creditors. Uses of cash include employee wages, rent/mortgage payments, taxes, and debt repayment. In 2015 the cash account increased by $20,000 which was a source of cash.

Accounts Receivable: This is money owed to the business for goods or services rendered; an increase in this account would be a source of cash while a decrease would be considered a use. In 2015 the accounts receivable increased by $5,000 which was a source of cash.

Inventory: Any increases or decreases in inventory reflect either sources or uses depending on whether items have been purchased or sold respectively. In 2015 there was an increase in inventory of $6,000 which was a use of cash.

Total Assets = Total Liabilities + Owner’s Equity
The total assets for 2015 were $81,000 while total liabilities and owner’s equity amounted to $76,000; thus it appears that my numbers do add up and make sense since the difference between these two values is equal to the net change in each individual account ($20k+$5k-$6k=$19k).