Homework Help is Here – Start Your Trial Now!
Business
Accounting
Changes in Current Operating Assets and Liabilities-Indirect Method Covington Corporation's comparative balance sheet for current assets and liabilities was as follows: Dec. 31, 20Y2 Dec. 31, 20Y1 Accounts receivable $17,500 $17,300 Inventory 65,300 66,000 Accounts payable 23,900 22,700 Dividends payable 25,000 27,000 Adjust net income of $123,200 for changes in operating assets and liabilities to arrive at net cash flow from operating activities.

Changes in Current Operating Assets and Liabilities-Indirect Method Covington Corporation's comparative balance sheet for current assets and liabilities was as follows: Dec. 31, 20Y2 Dec. 31, 20Y1 Accounts receivable $17,500 $17,300 Inventory 65,300 66,000 Accounts payable 23,900 22,700 Dividends payable 25,000 27,000 Adjust net income of $123,200 for changes in operating assets and liabilities to arrive at net cash flow from operating activities.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

< Snow Me How Changes in Current Operating Assets and Liabilities-Indirect Method Covington Corporation's comparative balance sheet for current assets and liabilities was as follows: Dec. 31, 20Y2 Dec. 31, 20Y1 Accounts receivable $17,500 $17,300 Inventory 65,300 66,000 Accounts payable 23,900 22,700 Dividends payable 25,000 27,000 Adjust net income of $123,200 for changes in operating assets and liabilities to arrive at net cash flow from operating activities. $

**Changes in Current Operating Assets and Liabilities—Indirect Method** ***Covington Corporation’s comparative balance sheet for current assets and liabilities was as follows:*** | | Dec. 31, 20Y2 | Dec. 31, 20Y1 | |-------------------------------------------|----------------|---------------| | Accounts receivable | $17,500 | $17,300 | | Inventory | $65,300 | $66,000 | | Accounts payable | $23,900 | $22,700 | | Dividends payable | $25,000 | $27,000 | *Adjust net income of $123,200 for changes in operating assets and liabilities to arrive at net cash flow from operating activities.* - **Accounts Receivable:** Slight increase from $17,300 to $17,500 - **Inventory:** Decrease from $66,000 to $65,300 - **Accounts Payable:** Increase from $22,700 to $23,900 - **Dividends Payable:** Decrease from $27,000 to $25,000 In this section, we adjust the net income for the changes in operating assets and liabilities to arrive at the net cash flow from operating activities, following the indirect method. The comparative balance sheet details the variations between the years, highlighting how individual components have changed over the comparative period.
Transcribed Image Text:**Changes in Current Operating Assets and Liabilities—Indirect Method** ***Covington Corporation’s comparative balance sheet for current assets and liabilities was as follows:*** | | Dec. 31, 20Y2 | Dec. 31, 20Y1 | |-------------------------------------------|----------------|---------------| | Accounts receivable | $17,500 | $17,300 | | Inventory | $65,300 | $66,000 | | Accounts payable | $23,900 | $22,700 | | Dividends payable | $25,000 | $27,000 | *Adjust net income of $123,200 for changes in operating assets and liabilities to arrive at net cash flow from operating activities.* - **Accounts Receivable:** Slight increase from $17,300 to $17,500 - **Inventory:** Decrease from $66,000 to $65,300 - **Accounts Payable:** Increase from $22,700 to $23,900 - **Dividends Payable:** Decrease from $27,000 to $25,000 In this section, we adjust the net income for the changes in operating assets and liabilities to arrive at the net cash flow from operating activities, following the indirect method. The comparative balance sheet details the variations between the years, highlighting how individual components have changed over the comparative period.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Horizontal Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS