During the current year, Woods Company earned net income of $56,000. Depreciation expense of $11,000 was included in the computation of net income. Woods’ accounting records show the following beginning and ending balances in its current assets and current liabilities for the year:

Ending Beginning Account Balance Balance Accounts receivable $56,700 $37,200 Inventory 34,400 43,100 Prepaid rent 2,000 0 Accounts payable 25,600 33,000 Salaries payable 1,300 0 .

Required: (1) Prepare the cash flows from operating activities section of Woods’ cash flow statement for the current year. 4

(2) What does your answer to (1) reveal compared with the company’s net income?

 TYK-1