In the current year, Faldo Company earned net income of $61,000. Included in the com- putation of net income was $12,500 of depreciation expense and a loss of $4,000 on the sale of land. During the year, the company had the following changes in its current assets and current liabilities:

ee eee Increases a ke Decreases ee a Accounts receivable, $5,700 Inventory, $7,400 Salaries payable, $3,000 Accounts payable, $9,600 Required: (1) Prepare the cash flows from operating activities section of Faldo’s cash flow statement for the current year.

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

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