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15 April, 03:03

Decrease in inventory $ 620 Decrease in accounts payable 260 Increase in notes payable 245 Increase in accounts receivable 275 Did cash go up or down? By how much?

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  1. 15 April, 03:19
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    Cash went up and by $330.

    Explanation:

    Cash flows using the indirect method measures activities in 3 groups namely; Operating, Investing and Financing.

    Given,

    Decrease in inventory $ 620 - This is a decrease in asset, like asset decrease as a result of sale for cash. Hence it is an inflow of cash.

    Decrease in accounts payable 260 - This is like the payment of cash to settle a payable (an obligation). Hence this is a cash outflow.

    Increase in notes payable 245 - This is an inflow of cash

    Increase in accounts receivable 275 - This is an increase in asset hence an outflow of cash.

    Considering the notes above,

    Cash movement = $620 - $260 + $245 - $275 = $330

    This is a net cash inflow. Hence cash went up and by $330.
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