The net income reported on the income statement for the current year was $256,700. Depreciation recorded on equipment and a building amounted to $76,800 for the year. 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	$68,280		$71,010
Accounts receivable (net)	86,580		87,630
Inventories	170,700		150,970
Prepaid expenses	9,490		10,010
Accounts payable (merchandise creditors)	76,270		79,250
Salaries payable	10,990		9,870

Question Content Area

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:
Decrease in prepaid expensesDepreciationIncrease in inventoriesNet income	$- Select -
Adjustments to reconcile net income to net cash flow from operating activities:
Decrease in accounts payableDecrease in accounts receivableDepreciationIncrease in accounts receivable	- Select -
Changes in current operating assets and liabilities:
Decrease in accounts receivableDecrease in salaries payableDepreciationIncrease in accounts receivable	- Select -
Decrease in inventoriesIncrease in accounts receivableIncrease in inventoriesIncrease in prepaid expenses	- Select -
Decrease in prepaid expensesIncrease in accounts payableIncrease in accounts receivableIncrease in prepaid expenses	- Select -
Decrease in accounts payableDecrease in salaries payableDepreciationIncrease in accounts payable	- Select -
Decrease in salaries payableIncrease in accounts receivableIncrease in prepaid expensesIncrease in salaries payable	- Select -
Net cash flow from operating activities		$fill in the blank c25b34012010076_15

Question Content Area

b. If the direct method had been used, would the net cash flow from operating activities have been the same?