Cash Flows from Operating Activities-Indirect Method The net income reported on the income statement for the current year was $135,400. Depreciation recorded on store equipment for the year amounted to $22,300. 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 $54,020 $49,160 Accounts receivable (net) 38,730 36,330 Merchandise inventory 52,890 55,310 Prepaid expenses 5,940 4,670 Accounts payable (merchandise creditors) 50,620 46,510 Wages payable 27,660 30,380 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: Adjustments to reconcile net income to net cash flow from operating activities: Changes in current operating assets and liabilities: 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