Question
Analyzing Changes in Balance Sheet Accounts A review of the balance sheet of Mathews Company revealed the following changes in the account balances: Required: 1.
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Analyzing Changes in Balance Sheet Accounts
A review of the balance sheet of Mathews Company revealed the following changes in the account balances:
Required:
1. For each of the below items, indicate whether it produces a cash inflow or a cash outflow.
a. Increase in accounts receivable - Cash inflow
- Cash outflow
b. Increase in retained earnings - Cash inflow
- Cash outflow
c. Decrease in salaries payable - Cash inflow
- Cash outflow
d. Increase in common stock - Cash inflow
- Cash outflow
e. Decrease in inventory - Cash inflow
- Cash outflow
f. Increase in accounts payable - Cash inflow
- Cash outflow
g. Decrease in long-term debt - Cash inflow
- Cash outflow
h. Increase in property, plant, and equipment - Cash inflow
- Cash outflow
2. Classify each change as a cash flow from operating activities (indirect method), cash flow from investing activities, or cash flow from financing activities.
a. Increase in accounts receivable - Operating activities
- Financing activities
- Investing activities
b. Increase in retained earnings - Operating activities
- Financing activities
- Investing activities
c. Decrease in salaries payable - Operating activities
- Financing activities
- Investing activities
d. Increase in common stock - Operating activities
- Financing activities
- Investing activities
e. Decrease in inventory - Operating activities
- Financing activities
- Investing activities
f. Increase in accounts payable - Operating activities
- Financing activities
- Investing activities
g. Decrease in long-term debt - Operating activities
- Financing activities
- Investing activities
h. Increase in property, plant, and equipment
- Operating activities
- Financing activities
- Investing activities
- b)
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Classify each change as a cash flow from operating activities (indirect method), cash flow from investing activities, or cash flow from financing activities.
-
a. Increase in accounts receivable b. Increase in retained earnings c. Decrease in salaries payable d. Increase in common stock e. Decrease in inventory f. Increase in accounts payable g. Decrease in long-term debt h. Increase in property, plant, and equipment
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