Canada Wide Transportation (CWT) began 2014 with accounts receivable, inventory, and prepaid expenses totalling $65,000. At the end of the year, CWT had a total of $78,000 for these current assets. At the beginning of 2014, CWT owed current liabilities of $42,000, and at year-end, current liabilities totalled $40,000.
Net income for the year was $80,000. Included in net income were a $4,000 gain on the sale of land and depreciation expense of $9,000.
Show how CWT should report cash flows from operating activities for 2014. CWT uses the indirect method. Use Exhibit 12-6 (p. 564) as a guide.