1. Fortune Corporation\'s comparative balance sheet for current assets and liabi

Question

1. Fortune Corporation's comparative balance sheet for current assets and liabilities was as follows:

Adjust Year 2 net income of $41,161 for changes in operating assets and liabilities to arrive at cash flows from operating activities using the indirect method.

$ . ____________

2.

Based on the following data for Privett Company, what is the amount of working capital?

Select the correct answer.

$114,858

$956,362

$146,508

$203,774

Dec. 31, Year 2 Dec. 31, Year 1 Accounts receivable $7,865 $4,023 Inventory 10,328 14,769 Accounts payable 4,101 5,661 Dividends payable 4,600 2,558

Explanation / Answer

1 Net income 41161 Increase in Accounts receivable -3842 Decease in Inventory 4441 Increase in Accounts payable -1560 Cash flows from operating activities 40200 2 Working capital=Current assets-Current liabilities = (63108+16115+86406+35635+2510)-(30280+6656+20330)= 146508 Option 3 is correct

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