The list includes all balance sheet accounts related to cash from operating acti

Question

The list includes all balance sheet accounts related to cash from operating activities. Case X Case Y Case Z Net income $ 4,000 $ 100,000 $ 72,000 Depreciation expense 30,000 8,000 24,000 Accounts receivable increase (decrease) 40,000 20,000 (4,000 ) Inventory increase (decrease) (20,000 ) (10,000 ) 10,000 Accounts payable increase (decrease) 24,000 (22,000 ) 14,000 Accrued liabilities increase (decrease) (44,000 ) 12,000 (8,000 ) For each of the above separate cases X, Y, and Z, compute cash flows from operations using the indirect method. (Amounts to be deducted should be indicated by a minus sign.)

Explanation / Answer

NOTE- THE AMOUNT WITH NEGATIVE SIGN  IS SHOWN IN BRACKET.

CASE X CASE Y CASE Z NET INCOME 4000 100000 72000 ADJUSTMENT TO RECPNCILE NET INCOME TO NET CASH DEPRECIATION 30000 8000 24000 CHANGES IN ASSET AND LIABILITIES ACCOUNT RECEIVABLES (40000) (20000) 4000 INVENTORY 20000 10000 (10000) ACCOUNT PAYABLE 24000 (22000) 14000 ACCRUED LIABILITY (44000) 12000 (8000) NET CASH PROVIDED BY OPERATING ACTIVITY (6000) 88000 96000

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