Mohammed Corporation's comparative balance sheet for current assets and liabilities was as follows: Dec. 31, 20Y2 Dec. 31, 20Y1 Accounts receivable $24,700 $24,000 Inventory 78,700 79,400 Accounts payable 16,700 15,500 Dividends payable 21,000 20,000 Adjust net income of $89,000 for changes in operating assets and liabilities to arrive at net cash flow from operating activities.
Mohammed Corporation's comparative balance sheet for current assets and liabilities was as follows: Dec. 31, 20Y2 Dec. 31, 20Y1 Accounts receivable $24,700 $24,000 Inventory 78,700 79,400 Accounts payable 16,700 15,500 Dividends payable 21,000 20,000 Adjust net income of $89,000 for changes in operating assets and liabilities to arrive at net cash flow from operating activities.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
I know in order to find changes in current operating assets using the indirect method you start with the net income and subtract the increase in liabilities which would be your

Transcribed Image Text:Mohammed Corporation's comparative balance sheet for current assets and liabilities was as follows:
Dec. 31, 20Y2
Dec. 31, 20Y1
Accounts receivable
$24,700
$24,000
Inventory
78,700
79,400
Accounts payable
16,700
15,500
Dividends payable
21,000
20,000
Adjust net income of $89,000 for changes in operating assets and liabilities to arrive at net cash flow from operating activities.
Expert Solution
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Step 1
Cash flow from operating activity indicates cash inflow and outflow of business operations. It can be prepared using direct and indirect methods.
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