Textbook Problem

Analyzing Changes in Balance Sheet Accounts

A review of the balance sheet of Mathews Company revealed the following changes in the account balances:

a. Increase in accounts receivable

b. Increase in retained earnings

c. Decrease in salaries payable

d. Increase in common stock

e. Decrease in inventory

f. Increase in accounts payable

g. Decrease in long-term debt

h. Increase in property, plant, and equipment

Required:

For each of the above items, indicate whether it produces a cash inflow or a cash outflow.

2. Classify each change as a cash flow from operating activities (indirect method), cash flow from investing activities, or cash flow from financing activities.