Cash Flows from Operating Activities--Indirect Method The net income reported on the income statement for the current year was $121,800. Depreciation recorded on store equipment for the year amounted to $20,100 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 $49,450 $45,490 Accounts receivable (net) 35,460 33,620 Inventories 48,410 51,180 Prepaid expenses 5,440 4,320 Accounts payable (merchandise creditors) 46,330 43,030 Wages payable 25,320 28,110 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 outflow, payments, decreases in cash, or any negative adjustments. 121.400 Statement of Cash Flows (partial) Cash flows from operating activities: Net Income Adjustments to reconcilie net income to net cash flow from operating activities: Depreciation Changes in current operating sets and abilities: Increase in accounts receivable Decrease in inventories 20,000 Increase in prepaid expenses Increase in accounts payable 4,320 eBook Show Me How Inventories 48,410 51,180 Prepaid expenses 5,440 Accounts payable (merchandise creditors) 46,330 43,030 Wages payable 25,320 28,110 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: Net Income 121.30 Adjustments to reconcile net income to net cash flow from operating activities: Depreciation 20,100 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 example revenues are recorded on b. Cash flows from operating activities differs from net income because it does not use the the income statement when