Fortune Corporation's comparative balance sheet for current assets and liabilities was as follows:
$\begin{array}{|l|r|r|}
\hline &\text { Dec. 31, Year 2} & \text { Dec. 31, Year 1}\
\hline\text { Accounts receivable } & \$ 7,500 & \$ 5,200 \
\hline \text { Inventory } & 11,500 & 16,000 \
\hline \text { Accounts payable } & 4,300 & 5,200 \
\hline \text { Dividends payable } & 4,000 & 3,000\
\hline
\end{array}$ Adjust Year 2 net income of $65,000 for changes in operating assets and liabilities to arrive at cash flows from operating activities using the indirect method.

Question

Fortune Corporation's comparative balance sheet for current assets and liabilities was as follows:
 $\begin{array}{|l|r|r|}
\hline &\text { Dec. 31, Year 2} &  \text {  Dec. 31, Year 1}\
\hline\text { Accounts receivable } & \$ 7,500 & \$ 5,200 \
\hline \text { Inventory } & 11,500 & 16,000 \
\hline \text { Accounts payable } & 4,300 & 5,200 \
\hline \text { Dividends payable } & 4,000 & 3,000\
\hline
\end{array}$ Adjust Year 2 net income of $65,000 for changes in operating assets and liabilities to arrive at cash flows from operating activities using the indirect method.

Quizplus · Accepted Answer

The Answer of Fortune Corporation's comparative balance sheet for current assets and liabilities was as follows:
 $\begin{array}{|l|r|r|}
\hline &\text { Dec. 31, Year 2} &  \text {  Dec. 31, Year 1}\
\hline\text { Accounts receivable } & \$ 7,500 & \$ 5,200 \
\hline \text { Inventory } & 11,500 & 16,000 \
\hline \text { Accounts payable } & 4,300 & 5,200 \
\hline \text { Dividends payable } & 4,000 & 3,000\
\hline
\end{array}$ Adjust Year 2 net income of $65,000 for changes in operating assets and liabilities to arrive at cash flows from operating activities using the indirect method.

Fortune Corporation's Comparative Balance Sheet for Current Assets and Liabilities