Effects of Brinker International€™s Current Liabilities on Its Statement of Cash Flows Brinker International operates Chili€™s, MacaroniGrill, and other restaurant chains. The following items are classified as current liabilities on Brinker International€™s balance sheets as of June 25, 2008, and June 27, 2007:

Required
1. Brinker uses the indirect method to prepare its statement of cash flows. Prepare the Operating Activities section of the cash flow statement, which indicates how each item will be reflected as an adjustment to net income.
2. Explain why an increase in a current liability account such as Accounts Payable appears as a positive amount on the statement of cash flows.

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(In thousands) 2008 2007 Current Liabilities: Current installments of long-term debt Accounts payable Accrued liabilities Income taxes payable Liabilities associated with assets held for sale $ 1,973 1,761 619 167,789 331,943 330,031 5,946 21,555 328 526,169 543,464 168, 17688 22 Total current liabilities