I’m working on a accounting writing question and need guidance to help me learn.
The consolidated cash flows from operations from Jones Corporation and its subsidiary Long Manufacturing for 20X2 decreased quite substantially from 20X1 despite the fact that consolidated net income increased slightly in 20X2.
- What factors included in the computation of consolidated net income may explain the difference between cash flows from operations and net income?
- How might a change in credit terms extended by Long Manufacturing explain a part of the difference?
- How would an inventory write-off affect cash flow from operations?
- How would a write-off of uncollectible accounts receivable affect cash flow from operations?
- How does the preparation of a statement of cash flows differ for a consolidated entity compared with that of a single corporate entity