The following information was taken from the 20X1 financial statements of Zurich Corporation, a maker of fine Swiss watches:

Net income	$ (200,000)
Depreciation	50,000
Increase (decrease) in
Accounts receivable	(140,000)
Inventories	25,000
Other current assets	10,000
Accounts payable	120,000
Accrued payables	(25,000)
Interest payable	50,000

Required:

1. Calculate Zurich’s cash flow from operating activities for 20X1.

2. Explain the reasons for the difference between the firm’s net income and its cash flow from operating activities in 20X1.