Question

Net cash flow from operating activities.

Changes in Current Operating Assets and Liabilities—Indirect Method

Mohammed Corporation's comparative balance sheet for current assets and liabilities was as follows:


Dec. 31, Year 2Dec. 31, Year 1
Accounts receivable$14,500
$12,300
Inventory48,800
57,400
Accounts payable11,600
10,200
Dividends payable23,000
24,000

Adjust net income of $107,300 for changes in operating assets and liabilities to arrive at net cash flow from operating activities.



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Answer #1
CASH FLOW FROM OPERATING ACTIVITIESAmount
Net Income107300
Increase in Accounts Receivable(14500-12300)-2200
Decrease in Inventory(48800-57400)8600
Increase in Accounts Payable(11600-10200)1400
 NET CASH FLOW FROM OPERATING ACTIVITIES115100


Dividends payable is a financing activity


answered by: Shaik sultan
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