The net income reported on the income statement for the current year was $129,600. Depreciation recorded on store equipment for the year amounted to $21,400. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows:

Line Item DescriptionEnd of YearBeginning of YearCash$49,770$45,790Accounts receivable (net)35,69033,840Inventories48,72051,510Prepaid expenses5,4704,350Accounts payable (merchandise creditors)46,63043,320Wages payable25,48028,300

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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.

Line Item DescriptionAmountAmountCash flows from (used for) operating activities: Decrease in accounts receivableDepreciationIncrease in inventoriesIncrease in wages payableNet income$- Select - Adjustments to reconcile net income to net cash flows from (used for) operating activities: Decrease in accounts payableDecrease in accounts receivableDepreciationIncrease in wages payableNet income- Select - Changes in current operating assets and liabilities: DepreciationIncrease in accounts receivableIncrease in inventoriesIncrease in wages payableNet income- Select - Decrease in accounts receivableDecrease in inventoriesDecrease in prepaid expensesIncrease in inventoriesNet income- Select - Decrease in accounts receivableDecrease in prepaid expensesIncrease in prepaid expensesIncrease in wages payableNet income- Select - Decrease in accounts payableDepreciationIncrease in accounts payableIncrease in wages payableNet income- Select - Decrease in accounts receivableDecrease in prepaid expensesDecrease in wages payableIncrease in wages payableNet income- Select - Net cash flows from operating activitiesNet cash flows used for operating activities $- Select -

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b. Cash flows from operating activities differs from net income because it does not use the fill in the blank 1 of 2

accrual basiscash basis

of accounting. For example revenues are recorded on the income statement when fill in the blank 2 of 2

they are earnedcash is received