Cash Flows from Operating ActivitiesIndirect Method

The net income reported on the income statement for the current year was $154,500. Depreciation recorded on store equipment for the year amounted to $25,500. 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
Cash	$60,870		$56,610
Accounts receivable (net)	43,640		41,830
Merchandise inventory	59,590		63,690
Prepaid expenses	6,700		5,380
Accounts payable (merchandise creditors)	57,040		53,550
Wages payable	31,170		34,980

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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 and for any adjustments, if required.