The net income reported on the income statement for the current year was $320,000. Depreciation recorded on equipment and a building amounted to $96,000 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows:

a. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method.
b. If the direct method had been used, would the net cash flow from operating activities have been the same? Explain.

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Cash Accounts receivable (net) Inventories Prepaid expenses Accounts payable (merchandise creditors) Salaries payable End of Year S 89,600 112,000 224,000 12,800 96,000 16,000 Beglnning of Year $ 96,000 118,400 200,000 14,400 104,000 13,600