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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?

User Discolor
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1 Answer

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Answer:

Cash went up and by $330.

Step-by-step 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.

User Allen Rohner
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