The net income reported on the income statement for the current year was $132,000. Depreciation recorded on store equipment for the year amounted to $21,800. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $52,540 $47,810 Accounts receivable (net) Inventories 37,670 35,330 51,440 53,790 Prepaid expenses 5,780 4,540 Accounts payable (merchandise creditors) Wages payable 49,230 26,900 45,230 29,550 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) Cash flows from operating activities: Net income 132,000 Adjustments to reconcile net income to net cash flow from operating activities: Depreciation 21,800 Changes in current operating assets and liabilities: Increase in accounts receivable Decrease in inventories Increase in prepaid expenses Increase in accounts payable Check My Work 0 more Check My Work uses remaining. -1,240 4,000 3333 -2,340 2,350 Previous Next 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) Cash flows from operating activities: Net income 132,000 Adjustments to reconcile net income to net cash flow from operating activities: Depreciation 21,800 Changes in current operating assets and liabilities: Increase in accounts receivable Decrease in inventories Increase in prepaid expenses Increase in accounts payable Decrease in wages payable Net cash flow from operating activities -2,340 2,350 -1,240 4,000 -2,650 b. Cash flows from operating activities differs from net income because it does not use the accrual basis the income statement when they are earned of accounting. For example revenues are recorded on