Exercise 12-7A (Algo) The direct versus the indirect method of determining cash flows from operating activities LO 12-1, 12-2 The following accounts and corresponding balances were drawn from Jogger Company's Year 2 and Year 1 year-end balance sheets. Account Title Accounts receivable Prepaid rent Utilities payable Other operating expenses payable The Year 2 income statement is shown next. Year 2 Year 1 $73,600 $80,300 790 1,000 1,810 860 34,900 32,500 Income Statement Sales Rent expense Utilities expense Other operating expenses Net Income Required $322,000 (23,200) (36,000) (166,500) $96,300 a. Prepare the operating activities section of the statement of cash flows using the direct method. b. Prepare the operating activities section of the statement of cash flows using the indirect method. Required A Required B Prepare the operating activities section of the statement of cash flows using the direct indicated with a minus sign.) Direct Method Cash flow from operating activities: Net cash flow from operating activities Required A Required B Prepare the operating activities section of the statement of cash flows using indicated with a minus sign.) Indirect Method Cash flow from operating activities: Plus: Less: Net cash flow from operating activities