Cash Flows from (Used for) Operating Activities

The net income reported on the income statement for the current year was $73,600. Depreciation recorded on store equipment for the year amounted to $27,400. 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	$23,500		$18,700
Accounts receivable (net)	56,000		48,000
Merchandise inventory	35,500		40,000
Prepaid expenses	4,750		7,000
Accounts payable (merchandise creditors)	21,800		16,800
Wages payable	4,900		5,800

a. Prepare the Cash Flows from (used for) 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 (used for) operating activities:
	$
Adjustments to reconcile net income to net cash flows from (used for) operating activities:
Changes in current operating assets and liabilities:
Net cash flow from operating activities		$

b. Cash flows from operating activities differ from net income because it does not use the_______ of accounting.

For example revenues are recorded on the income statement when ___________