Operating Activities SectionIndirect Method

The following account balances for the noncash current assets and current liabilities of Suffolk Company are available:

	December 31
	2017		2016
Accounts receivable	$43,260		$35,320
Inventory	30,410		40,250
Prepaid rent	16,840		14,910
Totals	$90,510		$90,480
Accounts payable	$26,220		$19,330
Income taxes payable	5,880		9,660
Interest payable	15,410		12,130
Totals	$47,510		$41,120

Net income for 2017 is $41,850. Depreciation expense is $20,290. Assume that all sales and all purchases are on account.

Required:

1. Prepare the Operating Activities section of the statement of cash flows using the indirect method. Use the minus sign to indicate cash payments, cash outflows, or decreases in cash.

Suffolk Company
Partial Statement of Cash Flows
For the Year Ended December 31, 2017
Cash Provided by Operating Activities
	$
Adjustments to reconcile net income to net cash provided by operating activities:
	$
	$
	$
	$
	$
	$
	$
	$

2. Net cash inflow from operating activities is $________ and the primary reason why it is higher than net income is ________ Other reasons for the higher amount of net cash inflow from operating activities are _________ and _________.