Question

debtors increase by $15,000 and creditors increase by $11,000. The effect on cash flow of the change in working capital is an:

a. decrease of 26,000

b. decrease of 4,000

c. increase of 4,000

d. increase of 26,000

Answer #1

Ans. Option b. decrease of 4,000

Explanation and calculation:

Debtors are the current assets and creditors are the current liabilities. Increase in current assets will increase working capital and increase in current liabilities will decrease working capital.

Change in working capital = Increase in debtors - Increase in creditors

= $15,000 - $11,000

= $4,000 (increase)

*Increase in working capital will decrease the net cash flow by the same amount, because in the calculation of net cash flow, increase in current assets are deducted and increase in current liabilities are added.

*So the calculation for change in net cash flow is as follows-

Change in net cash flow = Increase in liabilities - Increase in assets

= $11,000 - $15,000

= -$4,000 (decrease)

An increase in sort term investments of €450, a decrease in cash
deposits of €600 and an increase in creditors of €1,300 will result
in:
Select one:
a. an increase in working capital of €1,900
b. a decrease in working capital of €1,450
c. a decrease in working capital of €1,050
d. a decrease in working capital of €1,900
e. an increase in working capital of €1,300

During the past year, a company had cash flow to creditors, an
operating cash flow, and net capital spending of $29,348, $65,239,
and $26,720, respectively. The net working capital at the beginning
of the year was $11,395 and it was $13,000 at the end of the year.
What was the company's cash flow to stockholders during the
year?

During the past year, a company had cash flow to creditors, an
operating cash flow, and net capital spending of $30,930, $70,755,
and $31,480, respectively. The net working capital at the beginning
of the year was $12,613 and it was $15,100 at the end of the year.
What was the company's cash flow to stockholders during the
year?

For project A, the cash flow effect from the change in net
working capital is expected to be -1,100 dollars at time 2, the
level of net working capital is expected to be 1,000 dollars at
time 0, and the level of net working capital is expected to be
1,100 dollars at time 2. What is the cash flow effect from the
change in net working capital expected to be at time 1?

wilson and taylor are implementing a project which will increase
accounting payable by $5,000, increase inventory by $3,000, and
decrease accounts receivable by $2,000. all net working capital
will be recouped when the project terminates. what is the cash flow
related to the net working capital for the last year of the
project?
a. -$10,000
b. -$4,000
c. $0
d. $1,000
e. $4,000

Explain why the following stakeholders use accounting
information.
a. Creditors
b. Debtors
c. Employees
d. Analysts
e. Public

For project A, the cash flow effect from the change in net
working capital is expected to be -700 dollars at time 2 and the
level of net working capital is expected to be 1,400 dollars at
time 1. What is the level of current liabilities for project A
expected to be at time 2 if the level of current assets for project
A is expected to be 4,400 dollars at time 2?
For project A, the cash flow effect...

For project A, the cash flow effect from the change in net
working capital is expected to be -100 dollars at time 2 and the
level of net working capital is expected to be 1,600 dollars at
time 1. What is the level of current liabilities for project A
expected to be at time 2 if the level of current assets for project
A is expected to be 2,900 dollars at time 2?
For project A, the cash flow effect...

Your firm reported Cash Flow from Assets of $211,000 with
Operating Cash Flow of $235,000 and Capital Spending of $122,000.
What was your firms Change in Net Working Capital for the year?
A. -$98,000
B. $146,000
C. -$146,000
D. $98,000

Jackson Company had a net increase in cash from operating
activities of $10,000 and a net decrease in cash from financing
activities of $4,000. If the beginning and ending cash balances for
the company were $5,000 and $15,000, then net cash change from
investing activities was:
an outflow or decrease of $4,000.
an inflow or increase of $1,000.
an inflow or increase of $4,000.
zero.

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