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2 November, 12:27

Net income for the year was $29,500. Accounts receivable increased $2,500, and accounts payable increased $5,400. There were no other changes in noncash current assets and liabilities. Under the indirect method, the cash flow from operations is $32,400. T/F

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  1. 2 November, 15:16
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    True

    Explanation:

    The net cash flow for the year can be calculated using the following equation:

    net cash flow = net income + accounts payable - accounts receivable

    net cash flow = $29,500 + $5,400 - $2,500 = $32,400

    We have to subtract accounts payable since they were included in the net income but the cash has not been received yet.
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