Petroni Company reports the following selected results for its current calendar year.

Required

a. Prepare the operating section only of Petroni Company's statement of cash flows for the year.

b. Does the positive sign on depreciation expense indicate that the company is generating cash by recording depreciation? Explain.

c. Explain why the increase in accounts receivable is a use of cash in the statement of cash flows.

d. Explain why the decrease in prepaid expense is a source of cash in the statement of cash flows.

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Net income..... Depreciation expense.. Accounts receivable increase.. Accounts payable increase Prepaid expenses decrease. Wages payable decrease.. $130,000 28,000 10,000 6,000 3,000 4,000