b) Specify whether the transaction vill icrease ( +) decrase),rhave no effect (NE) on cash reported on the balance sheet. TAKING IT FURTHER Explain how an operating activity can increase cash but not increase proft. P17-2A Molloy Ltd. reported the following for the fiscal year 2017: Prepare operating activities section-indirect and direct methods. (LO 2,3) AP MOLLOY LTD. Income Statement Year Ended September 30, 2017 Sales Cost of goods sold $580,000 340,000 240,000 Gross proft Operating expenses Depreciation expense Gain on sale of land Profit before income tax Income tax expense Profit $96,000 25,000 (35,000 86,000 154,000 8,000 $116,000 Additional information 1. Accounts receivable decreased by $15,000 during 4. Accounts payable to suppliers increased by $10,000 5. Accrued expenses payable increased by $4,000 during 6. Income tax payable decreased by $6,000 during the year Prepare the operating activities section of the cash flow statement using either (a) the indirect method or (b) the the year during the year 2. Inventory increased by $7,000 during the year. 3. Prepaid expenses decreased by $5,000 during the year the year Instructions direct method, as assigned by your instructor