Assume you are in charge of preparing the operating activities section of the statement of cash ows 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? Activity Add or Subtract? An increase in accounts 1. receivable 2. Depreciation expense A decrease in accounts 3. payable A gain on the sale of 4. equipment A decrease in prepaid 5. insurance An increase in wages 6. payable Assume you are in charge of preparing the operating activities section of the statement of cash ows 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? Activity Add or Subtract? An increase in accounts 1. receivable I LI 2. Depreciation A decrease il 3. payable _ _ _ _ _ A gain on the Add back depreCIatIon expense smce It IS a non-cash expense. 4. equipment A decrease in Add decreases in current asset accounts. 5. insurance An increase l Add decreases in current liability accounts. 6. payable |_||_l|_||_||_| 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. Get more h. Subtract increases in current liability accounts