Business, 12.12.2019 03:31 TheOneHpLeft

Freemont company's accounts receivable decreased by $4,000 and its inventory decreased by $3,000 during the year. which of the following is the correct treatment within the operating activities section of the statement of cash flows using the indirect method? a. the change in accounts receivable is added to net income; the change in inventory is added to net income. b. the change in accounts receivable is subtracted from net income; the change in inventory is added to net income. c. the change in accounts receivable is added to net income; the change in inventory is subtracted from net income. d. the change in accounts receivable is subtracted from net income; the change in inventory is subtracted from net income.

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Answer from: mckinleesmomp6qj1e

a. The change in Accounts Receivable is added to net income; the change in Inventory is added to net income.

Explanation:

Operating activities: It includes those transactions which affect the working capital . The increase in current assets and a decrease in current liabilities would be deducted whereas the decrease in current assets and an increase in current liabilities would be added to the net income

These changes in working capital would be adjusted. Moreover, the depreciation expense is added to the net income

Answer from: Quest

cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.

empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.

optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.

instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.

harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.

Answer from: Quest

the investment was $14,174.196

explanation:

a lump sum means that the father of the example made one deposit and leave it be.

we need to know the value of a capital that generated at 4.05% per year during 28 years the sum of $48,613.24

$capital * (1+0.045)^{28} = 48,613.24$

now clearing the formula to solve for capital we got:

$capital = \frac{48,613.24}{(1+0.045)^{28}}$

and we reach the answer investment = $14,174.20

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