As she searches for an ice pack to put on her hand, Claudia concludes that all changes to assets should be reflected as positive numbers on the cash flow statement and all changes to liabilities should be shown as negative numbers. 1. Please comment on Claudia’s conclusion and offer a correction if necessary. Please attempt to provide a logical reasoning to back up your explanation. 2. One example in Claudia’s textbook showed the following account changes, as listed below. Please select TWO of the increases/decreases listed and specify in which section they would appear on the cash flow statement and whether they would be displayed as positive or negative numbers. Please be sure to label which items you selected. a. $9,000 increase in accounts receivable b. $8,000 decrease in inventory c. 40,000 increase in investments
Claudia is learning about the INDIRECT method of preparing the Statement of
As she searches for an ice pack to put on her hand, Claudia concludes that all changes to assets should be reflected as positive numbers on the cash flow statement and all changes to liabilities should be shown as negative numbers.
1. Please comment on Claudia’s conclusion and offer a correction if necessary. Please attempt to provide a logical reasoning to back up your explanation.
2. One example in Claudia’s textbook showed the following account changes, as listed below. Please select TWO of the increases/decreases listed and specify in which section they would appear on the cash flow statement and whether they would be displayed as positive or negative numbers. Please be sure to label which items you selected.
a. $9,000 increase in
b. $8,000 decrease in inventory
c. 40,000 increase in investments
d. $3,200 decrease in accounts payable
e. $2,200 increase in salaries payable
f. $6,000 increase in dividends payable
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