Cash Cash Flows from Operating Activities-Indirect Method The net income reported on the Income statement for the current year was $142,200. Depreciation recorded on store equipment for the year amounted to $23,500. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year $57,880 $52,670 Accounts receivable (net) 41,500 38,920 Inventories 56,660 59,250 Prepaid expenses 6,370 5,000 Accounts payable (merchandise creditors) 54,230 49,830 Wages payable 29,630 32,550 a. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Cash flows from operating activities: Adjustments to reconcile net income to net cash flow from operating activities: Cash flows from operating activities Net income Adjustments to reconcile net income to net cash flow from operating activities: Depreciation Changes in current operating assets and liabilities: Increase in accounts receivable Decrease in inventories Increase in prepaid expenses Increase in accounts payable Decrease in wages payable Net cash flow from operating activities of accounting. For b. Cash flows from operating activities differs from net income because it does not use the accrual basis render nn the income statement when they are earned