Cash Flows from Operating Activities-Indirect Method The net income reported on the income statement for the current year was $133,700. Depreciation recorded on store equipment for the year amounted to $22,100. 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 $52,950 $48,710 Accounts receivable (net) 37,970 36,000 Inventories 51,840 54,800 Prepaid expenses 5,820 4,630 Accounts payable (merchandise creditors) Wages payable 49,610 27,110 46,080 30,100 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: 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 Check My Work Previous Next > Inventories 51,840 54,800 Prepaid expenses 5,820 4,630 49,610 46,080 Accounts payable (merchandise creditors) Wages payable 27,110 30,100 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: 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 O O bill Decrease in inventories Increase in prepaid expenses Increase in accounts payable Decrease in wages payable Net cash flow from operating activities o Feedback Check My Work Previous Next