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

1. 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
Cash flows from operating activities:
	$
Adjustments to reconcile net income to net cash flow from operating activities:
Changes in current operating assets and liabilities:
Net cash flow from operating activities		$

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