The net income reported on the income statement for the current year was $150,500. Depreciation recorded on store equipment for the year amounted to $24,800. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows:

Line Item Description	End of Year	Beginning of Year
Cash	$58,850	$54,140
Accounts receivable (net)	42,200	40,010
Inventories	57,610	60,910
Prepaid expenses	6,470	5,140
Accounts payable (merchandise creditors)	55,140	51,220
Wages payable	30,130	33,460

Question Content Area

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.

blank Statement of Cash Flows (partial) blank

Line Item Description	Amount	Amount
Cash flows from (used for) operating activities:
Decrease in accounts receivableDepreciationIncrease in inventoriesIncrease in wages payableNet income
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
Changes in current operating assets and liabilities:

Question Content Area

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

accrual basis cash basis

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

they are earned cash is received