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Statement of Cash Flows - Indirect Method for Operating Activities The indirect method reconciles net income to cash flow from operating activities by backing out
Statement of Cash Flows - Indirect Method for Operating Activities The indirect method reconciles net income to cash flow from operating activities by backing out noncash flow items as well as items that are unrelated to operating activities such as gains and losses from sales of investments and retirement of debt. \begin{tabular}{|l|r|r|} \hline Net Income & Amounts & CashFlowfromOperatingActivities \\ \hline Increase in Accounts Receivable & 139,000 & \\ \hline Decrease in Accounts Payable & 4,700 & \\ \hline Decrease in Merchandise Inventory & 3,100 & \\ \hline Depreciation Expense & 1,900 & \\ \hline Debtclassifiedastradingsecuritieswerepurchasedduringtheyear.Unlikeotherpurchasesoninvestments,investmentsintradingsecuritiesareconsideredoperatingactivities & 2,500 & \\ \hline Againonsaleofinvestmentsinstock$400wasreportedintheincomestatement & & \\ \hline Increase in Prepaid Insurance & 600 & \\ \hline Decrease in Rent Received in Advance & 14,600 & \\ \hline \begin{tabular}{l} Net Cash Flow from Operating Activities \\ \hline \end{tabular} & 350 & \\ \hline \end{tabular}
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