Question

Changes in Current Operating Assets and Liabilities—Indirect Method

Victor Corporation's comparative balance sheet for current assets and liabilities was as follows:

	Dec. 31, Year 2		Dec. 31, Year 1
Accounts receivable	$24,800		$29,900
Inventory	61,200		53,200
Accounts payable	21,100		18,200
Dividends payable	23,000		24,000

Adjust net income of $111,100 for changes in operating assets and liabilities to arrive at net cash flow from operating activities.

Answer 1

Victor Corporation's
Statement of Cash Flows - Indirect method (Partial)
	$
Cash Flow from Operating Activities
Net Income	111,100.00
Changes in current operating assets and liabilities:
Decrease in Accounts receivable	5,100.00
Increase in inventory	(8,000.00)
Increase in Accounts payable	2,900.00
Net Cash provided by Operating Activities	111,100.00