Determining Net Income from Net Clow from Operating Activities Curwen Inc. reported net cash flows from operating activities of $151,800 on its statement of cash now for a recent year ended December 31. The following information was reserted in the Cash flows from used for) operating activites section of the statement of cash flows, using the indirect method Decrease in income taxes payable $3.100 Decrease in inventories 7,700 Depreciation 11,500 Gain on sale of investments 5,300 Increase in accounts payable 2.100 Increase in prepaid expenses 1.300 Increase in accounts receivable 5,800 a. Determine the net income reported by Curwen tre for the year ended December 31 b. Curwen's net income differed from cash flows from operations because of the following 1. Depreciation expense, which has no effect on net cash flows from operating activities 2. Gain on the sale of investment is reported in Investing activities section of the cash flow statement 3. Changes in current operating assets and abilities that are added or deducted, depending on their effect on cash flow but not in the income statement 4. Operating expenses are deducted from income but are added in the cash flow statement 5. Dividends are deducted from the investing activities in cash flow statement but are a charge against income in the income statement 1, 2 and 3 #greench Typically net income is the starting point of the statement of cash flows when using the indirect method to calculate the net cash flow from operating activities. How would have the Information given been used to adjust net income to net cash flow from operating activities? How can this same information be used to now calculate net income Review accrual accounting where revenues are recorded when earned and expenses are recorded when incurred. How does this differ with the concept of cash flow payments and receipts