Question

23 seconds the question will save this response. the year was $29.500. Accounts receivable increased $2.500 and accounts payable increaed 55.400. Under the indirect method to the response

Answer 1

In the question image, cash flows from operating activities' visible amount is $32400. If this is the amount given, then the answer is TRUE.

Below is the calculation:

In calculating the cash flows statement from indirect method, we will start with the net income. We will adjust the amount for increase or decrease in cash due to increase or decrease in current assets or current liabilities.Like, an increase in current assets will reduce cash, so we will deduct it and a decrease in current assets will increase cash, so we will add it. Similarly, an increase in current liabilities will increase cash, so it will be added and a decrease in current liabilities will reduce cash, so it will be deducted.

Cash flow statement (Partial):

Description	Amount
Cash flows from operating activities
Net income	$29500
Adjustments to reconcile net income to net cash from operating activities
Less: Increase in accounts receivable	- $2500
Add: Increase in accounts payable	$5400
Net cash flows from operating activities	$32400