Utah Corp. uses the indirect method to prepare the statement of cash flows. Refer to the...

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Utah Corp. uses the indirect method to prepare the statement of cash flows. Refer to the following section of the comparative

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Answer 1

Answer #1

During the year 2018, Merchandise inventory has increased by $48,000.

Increase in current assets is considered as a cash outflow under the operating activity section of the statement of cash flows.

Hence increase in merchandise inventory of $48,000 will be shown as subtraction from net income under the operating activities section.

Correct option is C.

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Answer 2

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