Ask Question
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?

+4
Answers (1)
  1. 15 April, 03:19
    0
    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.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Decrease in inventory $ 620 Decrease in accounts payable 260 Increase in notes payable 245 Increase in accounts receivable 275 Did cash go ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers