Question

Shell, Inc. uses the indirect method to prepare the statement of cash flows. Refer to the following section of the comparative balance sheet: Shell, Inc. Comparative Balance Sheet December 31, 2018 and 2017 Increase/(Decrease) $17,000 (23,000) 57,000 $51,000 2018 2017 Cash $42,000 32,000 180,000 $254,000 $25,000 55,000 123.000 $203,000 Accounts Receivable Merchandise Inventory Total Assets The change in Accounts Receivable is shown as a negative cash flow in the adjustments to net income True False

Answer 1

Answer:

given statement is False

Explanation:

given data

                                        2018               2017                   Increase/(Decrease)

cash                                 42000           25000                 17000

Accounts Receivable      32000            55000                23000

Merchandise Inventory   180000         123000                 57000

Total Assets                     254000         203000               51000

solution

as here In the indirect method of given statement in Cash flow,

and here current asset is increase and decreasing current liability that is  show you negative cash flow

but decreasing current asset and increasing current liability show you positive cash flow

so we know according to given data account receivable is decrease so it give you positive cash flow

so

So given statement is False