Fortune Corporation’s comparative balance sheet showed noncash current assets and liabilities as follows: Dec. 31, Year 2Dec. 31, Year 1Accounts receivable$7,500 $5,200 Merchandise inventory11,500 16,000 Accounts payable4,300 5,200 Dividends payable4,000 3,000 Adjust Year 2 net income of $65,000 for changes in current operating assets and liabilities to arrive at net cash flows from operating activities using the indirect method.$

Cash flows from operating activities: It is a section of Statement of cash flow that explains the…

Answered: Fortune Corporation’s comparative…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter15: Statement Of Cash Flows

Section: Chapter Questions

Problem 3BE

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Fortune Corporation’s comparative balance sheet showed noncash current assets and liabilities as follows:

	Dec. 31, Year 2	Dec. 31, Year 1
Accounts receivable	$7,500	$5,200
Merchandise inventory	11,500	16,000
Accounts payable	4,300	5,200
Dividends payable	4,000	3,000

Adjust Year 2 net income of $65,000 for changes in current operating assets and liabilities to arrive at net cash flows from operating activities using the indirect method.

$

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