(Learning Objective 3: Reporting cash fl ows from operating activities—indirect method)

Beautiful Atlantic Transportation (BAT) began 20X6 with accounts receivable, inventory, and prepaid expenses totaling $58,000. At the end of the year, BAT had a total of $55,000 for these current assets. At the beginning of 20X6, BAT owed current liabilities of $20,000, and at year-end current liabilities totaled $32,000.

Net income for the year was $12,000. Included in net income were a $2,000 loss on the sale of land and a depreciation expense of $8,000.

Show how BAT should report cash fl ows from operating activities for 20X6. BAT uses the indirect method.