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TRYCPA2008
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Joined: 17 Jul 2008
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Posts: 22

Posted: 25 May 2009 at 00:31 \| IP Logged

Hi ,

I thought of extending my date for FARE but I found out that I passed REG with 87(gave on 24th may) . So why not try it to give in this window only.

however if you try to study FARE in such short time .....I am going crazy!!!!

Can anyone explain in F7-41(2008)

For cash flow:

In operating activities :" Payment recd on installment note receivable for sale of inventory" + $100

I got that part that since it is inventory it will come in operating activities, but in this transaction cash is not involved and notes receivable is increased why is it added then, shouldn't it be subtracted.?

thanks please reply fast

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TRYCPA2008

jay_usa
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Joined: 16 Dec 2007
Location: United States
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Posted: 25 May 2009 at 12:07 \| IP Logged

There is a cash involved in this transaction. It says " Payment Received "

The reason is, this is installment sales where revenue is recognized when cash is actually collected. You sold the inventory with installment sales and you collected cash on your receivable. Therefore, your installment Note receivable account will be decreased and cash will be increased ( resulting increase in operating cash flow )

Hope that helps.

Thanks

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Jay CPA,CGMA,CITP,MBA

sheelacpa
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Joined: 25 Jul 2006
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Posted: 25 May 2009 at 12:17 \| IP Logged

I had same problem, we are talking about indirect method here . which considers non cash transactions. Please correct me if I am wrong.

If cash is received and account receivable is decreased this should come under direct method ?

Thanks

jay_usa
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Location: United States
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Posted: 25 May 2009 at 12:27 \| IP Logged

SheelaCPA,,

I think you are right, I did not think of this. Thanks for correction.

Anyone, Please explain this,

Thanks

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Jay CPA,CGMA,CITP,MBA

TRYCPA2008
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Joined: 17 Jul 2008
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Posts: 22

Posted: 25 May 2009 at 17:30 \| IP Logged

thanks jay_ usa ,yes these two things are contradictory!!!

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TRYCPA2008

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