eBook Show Me How Cash Flows from Operating Activities-Indirect Method The income statement disclosed the following items for the year: Depreciation expense $51,300 Gain on disposal of equipment 29,940 Net income 317,400 The changes in the current asset and liability accounts for the year are as follows: Increase (Decrease) Accounts receivable $7,990 Inventory (4,550) Prepaid insurance (1,710) Accounts payable (5,420) Income taxes payable 1,710 Dividends payable 1,200 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 out fia cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash Tow from operating activities Depreciation Check My Work 3 more Check My Work uses remaining Previous Next All work saved. Email Instructor Save and Exit Submit Assignment for Gra ebook Show Me How Dividends payable 1,200 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 out flows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash flow from operating activities Depreciation Gain on disposal of equipment Changes in current operating assets and liabilities: Increase in accounts receivable Decrease in Inventory Decrease in prepaid insurance Decrease in accounts payable Increase in income taxes payable Net cash flow from operating activities I II III b. Why is net cash flows from operating activities different than net income? Cash flows from operating activities is based on cash basis of accounting, whereas net income is computed using accrual basis of accounting Check My Work 3 more Check My Work usos remaining Previous Next > All work saved Email instructor Save and Ext Submit Assignment for Grading