Assume you are in charge of preparing the operating activities section of the statement of cash flows using the indirect method. In order to reconcile the company's net income back to the cash basis, would you (1) add or (2) subtract each of the following? Add or Subtract? Activity An increase in accounts 1. receivable Depreciation 2. expense A decrease in accounts 3. payable A gain on the sale of 4. equipment A decrease in prepaid 5. insurance An increase in 6. wages payable Choose from any drop-down list and then continue to the next question Assume you are in charge of preparing the operating activities section of the statement of cash flows using the indirect method. In order to reconcile the company's net income back to the cash basis, would you (1) add or (2) subtract each of the following? Add or Subtract? G 7 Activity An increase in accounts 1. receivable Depreciation 2. expense A decrease in accounts 3. payable A gain on the sale of 4. equipment A decrease in prepaid 5. insurance An increase in 6. wages payable Add back depreciation expense since it is a non-cash expense. Add decreases in current asset accounts. Add decreases in current liability accounts. Add gain made on a sale since it represents noncash revenue. Add increases in current asset accounts Add increases in current liability accounts. Subtract decreases in current asset accounts Subtract decreases in current liability accounts. Subtract depreciation expense since it is a non-cash expense. Subtract gain made on a sale since it represents noncash revenue. Subtract increases in current asset accounts. Subtract increases in current liability accounts. Choose from any drop-down list and then continue to the next