Brinker International operates Chili€™s, Macaroni Grill, and other restaurant chains. The following items are classified as current liabilities on Brinker International€™s balance sheets as of 2011 and 2010:

Required
1. Brinker uses the indirect method to prepare its statement of cash flows. Prepare the Operating Activities section of the cash-flow statement, which indicates how each item will be reflected as an adjustment to net income.
2. Explain why an increase in a current liability account such as Accounts Payable appears as a positive amount on the statement of cash flows.

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Brinker International, Inc. 2010 2011 (In thousands) Current Liabilities: Current installments of long-term debt Accounts payable Accrued liabilities Income taxes payable Total current liabilities $ 22,091 $ 16,866 112,824 300,540 19,647 87,549 287,365 8,596 $405,601 $449,877