Question

You are given the following information for Thrice Corp.:

   

Decrease in inventory	$	560
Decrease in accounts payable		230
Increase in notes payable		215
Increase in accounts receivable		245

  

Did cash go up or down? By how much?

  

  

Classify each event as a source or use of cash.

  

Answer 1

The cash is computed as shown below:

= Decrease in inventory + increase in notes payable - decrease in accounts payable - Increase in accounts receivable

= $ 560 + 215 - $ 230 - $ 245

= $ 300

Decrease in inventory: Source of cash

Increase in notes payable: Source of cash

Decrease in accounts payable: Use of Cash  

Increase in accounts receivable: Use of Cash

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