Cash Flows from Operating Activities-Indirect Method The net income reported on the income statement for the current year was $125,900. Depreciation recorded on store equipment for the year amounted to $20,800. 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 $50,110 345,600 Accounts receivable (net) 35,930 33,700 Merchandise inventory 49,000 51,300 Prepaid expenses 5,530 4.330 Accounts payable (merchandise creditor) 4,140 Wages payable 25.180 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, cast payments, decreases in cash, or any negative adjustments Statement of Cash Flows (partial) Cash flows from operating activities Adjustments to reconcile et Income to net cash flow from operating activities! Changes in current operating assets and abilities Net cash flow from operating activities b. Cash flows from operating activities differs from net income because it does not use the of accounting. For example revenues are recorded on the income statement when