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 accounts receivable and add your decrease in inventory and subtract your decrease in accounts payable in order to find the net income. However when I compute this it says I am incorrect. Mohammed Corporation's comparative balance sheet for current assets and liabilities was as follows:Dec. 31, 20Y2Dec. 31, 20Y1Accounts receivable$24,700$24,000Inventory78,70079,400Accounts payable16,70015,500Dividends payable21,00020,000Adjust 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.

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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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