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Use the Following Income Statement and Information About Changes in Noncash

Question 204

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Use the following income statement and information about changes in noncash current assets and liabilities to (1)prepare only the cash flows from operating activities section of the statement of cash flows using the indirect method and (2)compute the company's cash flow on total assets ratio for the year assuming that average total assets are $525,250.
Use the following income statement and information about changes in noncash current assets and liabilities to (1)prepare only the cash flows from operating activities section of the statement of cash flows using the indirect method and (2)compute the company's cash flow on total assets ratio for the year assuming that average total assets are $525,250. Changes in current asset and current liability accounts for the year that relate to operations follow. \begin{array} { | l | r | } \hline \text { Increase in accounts receivable } & \$ 32,000 \\ \hline \text { Increase in accounts payable (all accounts } & \\ \hline \text { payable transactions are for inventory) } &13,500\\ \hline \text { Decrease in prepaid expenses } & 9,200 \\ \hline \text { Decrease in merchandise inventory } &14,000\\ \hline \text { Decrease in long-term notes payable } & 20,000 \\ \hline \end{array}
Changes in current asset and current liability accounts for the year that relate to operations follow.
 Increase in accounts receivable $32,000 Increase in accounts payable (all accounts  payable transactions are for inventory) 13,500 Decrease in prepaid expenses 9,200 Decrease in merchandise inventory 14,000 Decrease in long-term notes payable 20,000\begin{array} { | l | r | } \hline \text { Increase in accounts receivable } & \$ 32,000 \\\hline \text { Increase in accounts payable (all accounts } & \\\hline \text { payable transactions are for inventory) } &13,500\\\hline \text { Decrease in prepaid expenses } & 9,200 \\\hline \text { Decrease in merchandise inventory } &14,000\\\hline \text { Decrease in long-term notes payable } & 20,000 \\\hline\end{array}

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