2. The direct method of determining eash flows begins with net income and lists all adjustments to convert net income to a cash flow basis. a. True b. False 3. Operating activities do nof include a. cash payments for wages. b. cash inflows from sales of goods and services. c. cash payments to the government for taxes. d. cash inflows from the sale of old equipment. 4. Which of the following items would be added to sales when using the direct method to calculate net cash flows from operating activities? (6) Decrease in Accounts Receivable b. Gain on Sale of Investments c. Decrease in Income Taxes Payable d. Increase in Inventory 5. Analysis of the financing activities section of the statement of cash flows will disclose: a. the amount of moncy loaned to others. b. the extent of investments in plant and equipment. c. net income for the period. d. any sales or repurchases of the company's own stock. 6. Jamison Company had Net Income for the year of $210,000. Prepaid Expenses increased by $9,000 during the year, Inventory decreased by $8,000, and Taxes Payable decreased by $2,000. What was the Net Cash Flow from Operating Activities using the Indireet Method (assume that no other account balances changed that would impact the computation). a. $207,000 c. $213,000 b. $211,000 d. $225,000