Reconciling Net Income and Cash Flow from Operations Using FSET For the year, Riffe Enterprises had the following summary information available concerning its operating activities. The company had no investing or financing activities this year. 1. Sales of services to customers on credit 2. Sales of services to customers for cash $615,360 36,960 3. Employee compensation earned 421,360 4. Cash payment in advance to landlord for offices 119,280 5. Cash paid to employees for compensation 6. Rental expense for offices used over the year 417,280 94,320 7. Collections from customers on accounts receivable. 579,280 8. Operating expenses (all paid in cash) 9. Depreciation expense 98,240 18,400 a. Enter the items above into the Financial Statement Effects Template. Under noncash assets, use three separate columns for accounts receivable and prepaid rent and the accumulated depreciation contra-asset. Calculate the totals for each column. Note: Use negative signs with answers, when appropriate. Transaction 1. Sales of services to customers on credit 2. Sales of services to customers for cash 3. Employee compensation earned 4. Cash payment in advance to landlord for offices 5. Cash paid to employees for compensation 6. Rental expense for offices used over the year 7. Collections from customers on accounts receivable. 8. Operating expenses (all paid in cash) 9. Depreciation expense Totals Accounts Accum. Wages Cash Asset + Receivable + Prepaid Rent - Depreciation = Payable + Contr. Capital + Earned Capital Revenue Expenses = Net income b. What was the company's net income for the year? $ What was the cash flow from operating activities? (Use the direct method.) $ c. Indicate the direction and amounts by which each of the following accounts changed during the year. 1. Accounts receivable Increased/Decreased by Amount = $ 2. Prepaid rent 3. Accumulated depreciation 4. Wages payable d. Using your results above, prepare the operating activities section of the statement of cash flows using the indirect format. Note: Use negative signs with answers, when appropriate. Net cash flow from operating activities (Indirect Method) $ Accounts receivable Prepaid rent Wages payable Cash flow from (used in) operating activities $