benbenxiong

I do not know anything about the question but I will take a run at it....I will try and simplify it too.


Think accrual.

14.3 in revenue. Did they collect all that in cash? No, because they AR rose by .7

So subtract .7 from 14.3 = 13.6

Now, AP increased. what does that mean? Well they held off paying some bills (e.g. accrued them) but paying or not paying cash to suppliers does not affect cash from customers so ignore it

Now unearned revenue increased by .5 what does that mean. Well customers paid them money but they have not been able to recognize the revenue. So that's cash from customers. Add it

The answer should be 14.1