Indirect Method For each of the following items, indicate whether it would be added to (A) or deducted from (D) net income to arrive at net cash fl ow provided by operating activities under the indirect method.

______ 1. Increase in accounts receivable ______ 2. Decrease in prepaid rent ______ 3. Decrease in inventory ______ 4. Decrease in accounts payable ______ 5. Increase in income taxes payable ______ 6. Depreciation expense ______ 7. Gain on sale of equipment ______ 8. Loss on early retirement of bonds AppendixLO1