Question

Selected data for Kris Corporation’s comparative balance sheets for Year 1 and Year 2 are as follows:

Answer 1

Answer:

Correct option : c. a decrease of $150,000

Explanation:

Based on the information given in Year 1 inventory shows the amount of $100,000 while the inventory in Year 2 shows the amount of $250,000 which simply means that inventory that is purchased is higher than the inventory that is sold which will inturn lead to outflow of cash because cash is been paid , hence cash will decreased by the amount of $150,000($100,000-$250,000).

Therefore the cash flow from accounts receivable would be recorded as:a decrease of $150,000