Question

Changes in Current Operating Assets and Liabilities—Indirect Method Blue Circle Corporation's comparative balance sheet for current assets and liabilities was as follows: Dec. 31, Year 2 Dec. 31, Year 1 Accounts receivable $21,900 $18,100 Inventory 58,000 65,900 Accounts payable 14,500 17,100 Dividends payable 19,000 18,000 Adjust net income of $83,100 for changes in operating assets and liabilities to arrive at net cash flow from operating activities. $ 89,800 x

Answer 1

Answer-----------$84,600

Working

Statement of Cash Flows (PARTIAL )- Indirect Method
Cash flows from Operating Activity
Net Income		$     83,100.00
Adjustments to reconcile Net Income to
Net Cash provided by Operating activities
Increase in accounts receivable	$     (3,800.00)
Decrease in inventory	$       7,900.00
Decrease in accounts payable	$     (2,600.00)
		$       1,500.00
Net Cash flows from Operating Activities		$     84,600.00

Dividend payable is not adjusted for operating section. It is used in financing section to calculate cash paid for dividends.