Cash Flows from Operating Activities-Indirect Method The net income reported on the income statement for the current year was $120,000. Depreciation recorded on store equipment for the year amounted to $19,800. 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 Cash $48,840 $44,930 Accounts receivable (net) 35,020 33,200 Merchandise inventory 50,550 47,810 5,370 4,270 Prepaid expenses Accounts payable (merchandise creditors) 45,760 42,500 Wages payable 25,010 27,770 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 outflows, 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: Changes in current operating assets and liabilities: Net cash flow from operating activities of accounting. For example revenues b. Cash flows from operating activities differs from net income because it does not use the are recorded on the income statement when