The statement of cash flows for Snap-On Incorporated for the year ended January 1, 2011, (which is the company’s 2010 fiscal year) includes the following items (excerpts only): (see attachment) A. W

The statement of cash flows for Snap-On Incorporated for the year ended January 1, 2011, (which is the company’s 2010 fiscal year) includes the following items (excerpts only): (see attachment)

A. Why does Snap-On add back depreciation to compute net cash provided by operating activities? is depreciation a source of cash?

B. Snap-On reports cash flows associated with accounts receivable. In 2009, this item is a cash inflow of $52.4 million and in 2010 this item is a cash outflow of $56.5 million. Explain why this item is on the statement. Why is it a cash inflow one year and a cash outflow the other year?

C. Did Snap-On accounts payable increase or decrease during 2009? How do you know?

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