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Changes in Current Operating Assets and Liabilities Indirect Method Mohammed Corporation's comparative balance sheet for current assets and liabilities was as follows: Dec. 31, Year

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Changes in Current Operating Assets and Liabilities Indirect Method Mohammed Corporation's comparative balance sheet for current assets and liabilities was as follows: Dec. 31, Year 2 Dec. 31, Year 1 Accounts receivable $29,300 $28,500 Inventory 60,800 61,500 Accounts payable 23,500 22,100 Dividends payable 20,000 19,000 Adjust net income of $88,400 for changes in operating assets and liabilities to arrive at net cash flow from operating activities. $l:l x Feedback V Check My Work Once you have calculated the changes in the current operating assets and liabilities determine what impact those changes would have on cash. For example if accounts receivable has increased from last year to this year does that mean the company has collected more cash or less cash? If accounts payable has decreased does that mean the company has more cash or less cash? Learning Objective 2

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