Indirect: Computing cash flows from operation
Case X Case Y Case Z
Net income $7,200 $180,000 $129,600
Depreciation expense 54,000 14,400 43,200
Accounts receivable increase (decrease) 72,000 36,000 (7,200)
Inventory increase (decrease) (36,000) (18,000) 18,000
Accounts payable increase (decrease) 43,200 (39,600 ) 25,200
Accrued liabilities increase (decrease) (79,200 ) 21,600 (14,400)
For each of the above separate cases X, Y, and Z, compute cash flows from operations using the indirect method.

Respuesta :

Answer:

                                                          CASE X      CASE Y       CASE Z

NET INCOME                                    $7,200      $180,000    $129,600

ADJUSTMENT TO RECONCILE

NET INCOME TO NET CASH

DEPRECIATION                                 $54,000   $14,400      $43,200

CHANGES IN ASSET & LIABILITIES

ACCOUNT RECEIVABLES                $72,000    $36,000     ($7,200)

INVENTORY                                      ($36,000)  ($18,000)     $18,000

ACCOUNT PAYABLE                        $43,200    ($39,600)    $25,200

ACCRUED LIABILITY                        ($79,200)    $21,600     ($14,400)

NET CASH PROVIDED BY               $61,200    $194,400    $194,400

OPERATING ACTIVITY