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The net income reported on the income statement for the current year was $210,000. Depreciation recorded on equipment and a building $62,500 for the year.

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The net income reported on the income statement for the current year was $210,000. Depreciation recorded on equipment and a building $62,500 for the year. Balances of the current asset and current liabilities accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $56,000 $59,500 Accounts receivable (net) 71,000 73,400 Inventories 140,000 126,500 Prepaid expenses 7,800 8,400 Accounts payable (merchandise creditors) 62,600 66,400 Salaries payable 9,000 8,250 Required: a. Prepare the cash flows from operating activities section of the statement of cash flows, using the indirect method. Use the minus sign to cash out flows, cash payments, decreases in cash, or any negative adjustments. Operating Activities Section 210.000 Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash flow from operating activities: Depreciation Changes in current operating assets and liabilities: Decrease in accounts receivable 62 500 2.400 Required: 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 out flows, cash payments, decreases in cash, or any negative adjustments. Operating Activities Section 210,000 62,500 Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash flow from operating activities: Depreciation Changes in current operating assets and liabilities: Decrease in accounts receivable Increase in inventories Decrease in prepaid expenses Decrease in accounts payable Increase in salaries payable Net cash flow from operating activities 2.400 13.500 600 3.800 b. If the direct method had been used, would the net cash flow from operating activities have been the same

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