Cash Flows from Operating Activities-indirect Method The net income reported on the income statement for the current year was $117,100. Depreciation recorded on store equipment for the year amounted to $19,300. 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 $47,660 $43,850 Accounts recevable (net) 34,170 32,410 Merchandise inventory 46,660 49.330 Prepaid expenses 5,740 4,170 Accounts payable (merchandise creditors) 44,660 41,480 Wages payable 24,400 27,100 a. Prepare the Cash Flows tromi 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: Nel 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 Decrease in merchandise inventory Increase in prepaid expenses Increase in accounts payable Decrease in wages payable Net cash flow from operating activities Feedback b. Cash flows from operating activities differs from net income because it does not use the accrual basis of accounting. For example revenues are recorded on the income statement when they are earned Feedback Fathur