Assume you are in charge of preparing the operating activities section of the statement of cash flows using the indirect method. In order to reconcile the company’s net income back to the cash basis, would you (1) add or (2) subtract each of the following?

1. An increase in accounts receivable 

2. Depreciation expense 

3. A decrease in accounts payable 

4. A gain on the sale of equipment 

5. A decrease in prepaid insurance 

6. An increase in wages payable.