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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
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< 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.
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