Answer:
Explanation:
Operating activities : It includes all activities related to the changes in the working capital or changes in the current assets and current liabilities.
The increase in current liabilities increase the cash and decrease in current liabilities decrease the cash, so the adjustment is made accordingly. But it is opposite with the current assets.
The Net cash in operating activities under indirect method is shown below:
= Net income + Depreciation expense - decrease in accounts payable + decrease in inventory - increase in accounts receivable
= $65,000 + $19,000 - $3,500 + $4,000 - $6,500
= $78,000
The other effect like increase in bond payable, sale of common stock for cash is classified under financing activities. Thus, it is not considered in computation part.
Hence, the Net cash in operating activities under indirect method is $78,000
Answer:
An investment with more liquidity would be ideal for someone who knows they will nee cash in the near future.
Explanation:
More liquid assets are those that can be turn into cash more quickly than those that less liquid assets.
If one is thinking about investing in a liquid asset, surely is because it will need the cash in the short run. On the contrary, we could invest in other financial instruments less liquid (typically those who offer higher yields and have longer terms), because we are not going to need the money for the moment, and we want to take advantage of that to get a higher yields.
