Operating Activities Section-Indirect Method The following account balances for the noncash current assets and current liabilities of Suffolk Company are available: Accounts receivable Inventory Prepaid rent Totals Accounts payable Income taxes payable Interest payable Totals December 31 2017 2016 $43,000 $34,510 30,210 40,160 16,550 15,330 $89,760 $90,000 $25,890 $19,290 6,100 10,190 14,550 12,370 $46,540 $41,850 Net income for 2017 is $43,870. Depreciation expense is $18,360. Assume that all sales and all purchases are on account. Required: 1. Prepare the Operating Activities section of the statement of cash flovs using the indirect method. Use the minus sign to indicate cash payments, cash outflovs, or decreases in cash. Suffolk Company Partial Statement of Cash Flows For the Year Ended December 31, 2017 Cash Provided by Operating Activities Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense Increase in accounts receivable Decrease in inventory Increase in prepaid rent Increase in accounts payable Decrease in income taxes payable Increase in interest payable Net cash outflow from operating activities X and the primary reason why it is higher than net income is depreciation Other reasons for the higher amount of net cash inflow from operating activities are 2. Net cash inflow from operating activities is $ and Feedback Check My Work Changes in current assets and current liabilities affect the operating activities of the statement of cash flows. Current assets have an indirect relationship and current liabilities have a direct relationship. Feedback Check My Work Partially correct