Question

Shell, Inc. uses the indirect method to prepare the statement of cash flows. Refer to the following section of the comparative balance sheet: Shell, Inc. Comparative Balance Sheet December 31, 2018 and 2017 Increase/(Decrease) $17,000 (23,000) 57,000 $51,000 2018 2017 Cash $42,000 32,000 180,000 $254,000 $25,000 55,000 123.000 $203,000 Accounts Receivable Merchandise Inventory Total Assets The change in Accounts Receivable is shown as a negative cash flow in the adjustments to net income True False

Answer 1

given statement is False

Step-by-step explanation:

given data

2018 2017 Increase/(Decrease)

cash 42000 25000 17000

Accounts Receivable 32000 55000 23000

Merchandise Inventory 180000 123000 57000

Total Assets 254000 203000 51000

solution

as here In the indirect method of given statement in Cash flow,

and here current asset is increase and decreasing current liability that is show you negative cash flow

but decreasing current asset and increasing current liability show you positive cash flow

so we know according to given data account receivable is decrease so it give you positive cash flow

so

So given statement is False