The income statement disclosed the following items for the year:

Depreciation expense	$54,300
Gain on disposal of equipment	31,680
Net income	395,000

The changes in the current asset and liability accounts for the year are as follows:

	Increase (Decrease)
Accounts receivable	$8,460
Inventory	(4,820)
Prepaid insurance	(1,810)
Accounts payable	(5,730)
Income taxes payable	1,810
Dividends payable	1,270

a. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.

Statement of Cash Flows (partial)
For the year ended Dec. 31, --
Cash flows from operating activities:
	$
Adjustments to reconcile net income to net cash flow from operating activities:
Changes in current operating assets and liabilities:
Net cash flow from operating activities		$

b. Why is net cash flows from operating activities different than net income?

Cash flows from operating activities is based on of accounting, whereas net income is computed using of accounting.