Calculate the cash flow due to production of goods and cash flow from sales if sales were $500, cost of goods sold were $180, accounts receivable increased by $20, and inventory decreased by $18.

Question

Quizplus · Accepted Answer

Cash flow due to production of goods = Cost of goods sold - Decrease in inventory
Cash flow due to production of goods = $180 - (-$18) = $198
Cash flow from sales = Sales - Increase in accounts receivable
Cash flow from sales = $500 - $20 = $480

Calculate the Cash Flow Due to Production of Goods and Cash