The income statement disclosed the following items for the year:

Depreciation expense	$34,500
Gain on disposal of equipment	20,100
Net income	299,300

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

	Increase (Decrease)
Accounts receivable	$5,370
Inventory	(3,060)
Prepaid insurance	(1,150)
Accounts payable	(3,640)
Income taxes payable	1,150
Dividends payable	800

Question Content Area

a. Prepare the Cash Flows from (used for) 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) 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 accountin