The income statement of Booker T Industries Inc. for the current year ended June 30 is as follows: Sales $352,910 200,390 Cost of goods sold Gross profit $152,520 Operating expenses: Depreciation expense $27,080 Other operating expenses 71,590 Total operating expenses 98,670 Income before income tax $53,850 Income tax expense 14,940 Net income $38,910 Changes in the balances of selected accounts from the beginning to the end of the current year are as follows: Increase/ Decrease $(7,820) Accounts receivable (net) Inventories 2,720 Prepaid expenses Accounts payable (merchandise creditors) Accrued expenses payable (operating expenses) (2,610) (5,560) 780 (1,870) Income tax payable a. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the direct method. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments. Booker T Industries Inc. Cash Flows from Operating Activities Section For the year ended on June 30 Cash flows from operating activities: Net cash flow from operating activities b. What does the direct method show about a company's cash flows from operating activities that is not shown using the indirect method? With the , the cash received less the cash payments is the net cash flow from operating activities. Individual cash receipts and payments are reported in the Cash Flows from Operating Activities section. The adjusts accrual-basis net income for revenues and expenses that do not involve the receipt or payment of cash to arrive at cash flows from operating activities