E12-2 Understanding the Computation of Cash Flows from Operating Activities (Indirect Method) (LO 12- 2] Suppose your company sells services of $290 in exchange for $165 cash and $125 on account. Required: 1. Prepare the journal entry to record this transaction. 2. Identify the amount that should be reported as net cash flow from operating activities. 3. Identify the amount that would be included in net income. 4. Show how the indirect method would convert net income (requirement 3) to net cash flow from operating activities (requirement 2). Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Prepare the journal entry to record this transaction. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Record the service revenue of $165 for cash and $125 on account. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal Required 1 Required 2 Required 3 Required 4 Identify the amount that should be reported as net cash flow from operating activities. Net Cash Flow Required 1 Required 2 Required 3 Required 4 Identify the amount that would be included in net income. Net Income Required 2 Required 4 > Required 1 Required 2 Required 3 Required 4 Show how the indirect method would convert net income (requirement 3) to net cash flow from operating activities (requirement 2). (Amounts to be deducted should be indicated with a minus sign.) Net Income Increase in Accounts Receivable Net Cash Flow from Operating Activities $ Required 3 Required 4 >