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Question
Fortune Corporation’s comparative balance sheet showed noncash current assets and liabilities as follows:
| Dec. 31, Year 2 | Dec. 31, Year 1 | |
| Accounts receivable | $ 7,500 | $ 5,200 |
| Merchandise inventory | 11,500 | 16,000 |
| Accounts payable | 4,300 | 5,200 |
| Dividends payable | 4,000 | 3,000 |
Adjust Year 2 net income of $65,000 for changes in current operating assets and liabilities to arrive at net cash flows from operating activities using the indirect method.
Answer
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