Advance Systems Inc. reported the following information for 20X0 and 20X1: 20X0 20X1 Accounts receivable $101,000 $93,000 Prepaid expenses 5,000 6,000 Accounts payable 71,000 76,000 Salaries payable 5,000 4,000 Net income 67,000 Loss on sale of equipment 5,000 Depreciation expense 11,000 If Advance Systems uses the indirect method to prepare the operating activities section of the statement of cash flows, what amount will be reported as net cash flows from operating activities for 20X1?

a. $72,000 b. $78,000 c. $98,000 d. $94,000