Determining net income from net cash flow from operating activities OBJ. 2 Curwen Inc. reported net cash flow from operating activities of $357,500 on its statement of cash flows for the year ended December 31, 2016. The following information was reported in the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method:

Decrease in income taxes payable $ 7,700 Decrease in inventories 19,140 Depreciation 29,480 Gain on sale of investments 13,200 Increase in accounts payable 5,280 Increase in prepaid expenses 2,970 Increase in accounts receivable 14,300

a. Determine the net income reported by Curwen Inc. for the year ended December 31, 2016.

b. Briefly explain why Curwen’s net income is different than net cash flow from operating activities.