Avatar Company Uses the Indirect Method to Prepare the Statement

question 144

True/False

Avatar Company uses the indirect method to prepare the statement of cash flows. Please refer to the following section of the comparative balance sheet:
$\begin{array}{|l|r|r|r|}\hline&2014 & 2013 & \text { Increase/decrease }\\\hline \text { Cash } & \$ 33,000 & \$ 18,000 & \$ 15,000 \\\hline \text { Accounts receivable } & 22,000 & 35,000 & (13,000) \\\hline \text { Inventory } & 170,000 & 115,000 & 55,000 \\\hline \text { Total assets } & \$ 225,000 & \$ 168,000 & \$ 57,000 \\\hline\end{array}$
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The change in accounts receivable will be shown as a positive cash flow in the adjustments to Net income.

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