Canyon tours showed the following components of working capital last year: beginning of yearend of year accounts receivable$ 25,40023,700 inventory12,70013,900 accounts payable15,20017,900 a. what was the change in net working capital during the year? (a negative amount should be indicated by a minus sign.) b. if sales were $36,700 and costs were $24,700, what was cash flow for the year? ignore taxes.

a. - $3,200

b. $15,200

Explanation:

The computation of the working capital for both the years is shown below:

Beginning of Year

= Accounts receivable + inventory - accounts payable

= $25,400 + $12,700 - $15,200

= $22,900

End of year

= Accounts receivable + inventory - accounts payable

= $23,700 + $13,900 - $17,900

= $19,700

So, the change in net working capital

= $22,900 - $19,700

= - $3,200

b. The computation of the  cash flow for the year is shown below:

= Sales - costs - change in working capital

= $36,700 - $24,700 - (-$3,200)

= $15,200

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