Question

"The following accounts increased/(decreased) during 2020: Accounts Receivable ($12,000), Inventory $11,000, and Accounts Payable ($13,000). Prepare the cash flows from operating activities section of Bloom's 2020 statement of cash flows using the indirect method."

Answer 1

Solution :

The Cash flow from the operating activities

Sales revenue                                                                           $ 2,00,000

Less : Cost of goods sold                                                         $ 1,20,000

Less : operating expenses paid

(excluding depreciation, 50,000 - 21,000)                             $ 29,000

Cash generated from the operating activities                         $ 51,000

Increase in current assets liabilities

Increase in accounts receivable                                                $ 12,000

Increases in inventory                                                                $ 11,000

Increase in accounts payable                                                    $ 13,000

Cash flow from the operating activity                                       $ 41,000