STATEMENT OF CASH FLOWS: REPORTING THE EFFECTS OF OPERATING, INVESTING, AND FINANCING ACTIVITIES ON CASH FLOWS T4-X
4.18(Information Technologies; calculating and interpreting cash flow from operations.)
Decrease in Accounts Receivable778
Decrease In Inventories76
Decrease in Prepayments102
Increase in Accounts Payable90
Decrease in Other Current Liabilities)
Cash Flow from Operations
a$312 = $14,508 – $114 – $210 – $13,872.
b.Information Technologies decreased its noncash current assets, particularly accounts receivable, generating positive cash flows. Although it repaid other current liabilities, the reduction in accounts receivable dominated and caused cash flow from operations to exceed net income.