Item 2: Entity B reported net income of $10,000 for the current year. Depreciation recorded on buildings and equipment amounted to $65,000 for the year. Balances of needed current asset and current liability accounts at the beginning and end of the year are as follows. Be sure to compute the change by subtracting the beginning of year balance from the end of year balance.

Instructions:

Compute the changes in the accounts for each year and then prepare the cash flows from the operating activities section of the statement of cash flows using the indirect method.

Also, a gain on the sale of retired painting equipment of $2,500 was reported