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6 January, 06:38

What is the overall change in cash resulting from: $300 increase in inventories, $150 increase in accounts payable, $120 decrease in accounts receivable, $60 decrease in other current assets, $150 decrease in other current liabilities?

(A) - $120

(B) - $240

(C) $180

(D) $120

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Answers (1)
  1. 6 January, 06:53
    0
    (A). - $ 120

    Explanation:

    The changes to cash are from the following rules

    Increase in assets and decrease in liabilities is a decrease in cash

    Decrease in assets and increase in liabilities is and increase in cash

    Using the data in the question,

    Cash Movement

    increase in inventories $ 300 ($ 300)

    Increase in accounts payable $ 150 $ 150

    Decrease in accounts receivable $ 120 $ 120

    Decrease in other current assets $ 60 $ 60

    Decrease in other current liabilities $ 150 ($ 150)

    Net movement in Cash $ (120)
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