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What is the impact on cash flow from operations in the current year based on the change in operating assets and liabilities listed below
2 Balance sheets
Prior Year Current Year
4
5 Accounts receivable 1,725 1,825
6 Inventories 1,535 1,785
7 Accounts payable 1,325 1,475
a. -200
b. 0
c. -150
d. 200

Sagot :

Anthougoidn

Answer:

The impact on cash flow from operations in the current year based on the changes in operating assets and liabilities is:

a. -200

Explanation:

a) Data and Calculations:

                                Prior Year Current Year   Changes

Accounts receivable     1,725       1,825               $100

Inventories                    1,535       1,785              $250

Accounts payable         1,325       1,475              $150

b) Accounts receivable increased by $100, thereby reducing cash inflows. Inventories increased by $250, thereby reducing cash inflows. Accounts payable increased by $150, thereby increasing cash inflows. The net effect or impact is a reduction of $200 in the cash from operations.

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