Majestic America Transportation (MAT) began 20X6 with accounts receivable, inventory, and prepaid expenses totaling $65,000. At the end of the year MAT had a total of $78,000 for these current assets. At the beginning of 20X6, MAT owed current liabilities of $42,000, and at year end current liabilities totaled $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 MAT should report cash flows from operating activities for 20X6. MAT uses the indirect method. Use Exhibit 12-6 as a guide.

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EXHIBIT 12-6 Statement of Cash Flows-Operating Activities by the Indirect Method The Roadster Factory, Inc. (TRF) Statement of Cash Flows (Indirect Method) For the Year Ended December 31,20X9 (In thousands) Cash flows from operating activities: $50 Net income Adjustments to reconcile net income to net cash provided by operating activities: S 18 Gain on sale of plant assets Increase in accounts recei va ble Decrease in inventory Increase in prepaid expenses Increase in accounts pay able Decrease in salary and wage payable Decrease in accrued liabili (15) 34 27 $77 Net cash provided by operating acti vitis