Cash Flows from Operating ActivitiesIndirect Method

The net income reported on the income statement for the current year was $284,400. Depreciation recorded on equipment and a building amounted to $85,000 for the year. 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	$76,220		$80,030
Accounts receivable (net)	96,650		98,760
Inventories	190,550		170,140
Prepaid expenses	10,590		11,280
Accounts payable (merchandise creditors)	85,140		89,310
Salaries payable	12,270		11,120

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	$284,400
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation	$85,000
Changes in current operating assets and liabilities:
Decrease in accounts receivable	$2,110
Increase in inventories	$
Decrease in prepaid expenses	$690
Decrease in accounts payable	$
Increase in salaries payable	$1,150
Net cash flow from operating activities		$348,770