change in retained earnings…+20 change in accounts receivable…+5 change in inventory…+3 change in accounts payable… -7 company declared and paid a cash divadend…5 depreciation…25 CFO = A. 10 B. 25 C. 30 D. 35
30? Re=NI-Div NI change = change in RE CFO = NI change + depreciation -increased AR-increased inventory-decreased AP=20+25-5-5-7=30 Edit: dividends included already
B
35? 25+25-5-7-3 NI + depreciation - increased AR - Payables - Inventory ? Dividends is not a CFO.
REbeg + NI - Div = REend NI = REend - REBeg + Div NI = 20+5 = 25 25-5-3-7+25 = 35 D
wow, looks you just made a change Map1. You were right the first time. The answer is D because the change in retained earnings is $20 and dividends are paid from retained earnings, which is another way of saying ADD THE DIVIDENDS TO RETAINED EARNINGS WHEN COMPUTING CFO. I got is wrong because when I saw the dividends, my first thought was “that’s a financing outflow” Now I know to add the dividends to Retained Earnings
Yes, that’s how stupid I am!
strangedays Wrote: ------------------------------------------------------- > B WFT… I forgot to add back dividend 
No, I am way stupider, this is indirect right, so we reconcile the NI?
Yes amber
This was definitely a question in Dec 2007, numbers were different.
pretty straighforward…Although I made a stupid mistake. I promise…never again
25 - 5 - 3 -7 + 25 = 35 D i’d say this is also straight from text if i remember correctly. FSA is KILLING MEEEEE
D… thank you.