Refer to all of the facts in Problem 12-3A. Required 1. Prepare a statement of cash flows
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Required
1. Prepare a statement of cash flows for 2012 using the indirect method in the Operating Activities section.
2. On the basis of your statement in part (1), draft a brief memo to the president to explain why cash decreased during such a profitable year. Include in your explanation any recommendations for improving the company's cash flow in future years.
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1 Changes in account balances and explanations in thousands of dollars Net Change Explanation Cash 70 Accounts receivable 85 Inventory 20 Prepayments ...View the full answer
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Related Book For
Using Financial Accounting Information The Alternative to Debits and Credits
ISBN: 978-1111534912
8th edition
Authors: Gary A. Porter, Curtis L. Norton
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In order to determine the amount of cash created by operating operations, the indirect technique for preparing the statement of cash flows entails adjusting net income with changes in balance sheet.
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