Cash Flows from Operating Activities-Indirect Method The income statement disclosed the following items for the year: $33,400 Depreciation expense Gain on disposal of equipment 19,500 Net income 208,300 The changes in the current asset and liability accounts for the year are as follows: Increase (Decrease) Accounts receivable $5,210 Inventory Prepaid insurance Accounts payable Income taxes payable (2,960) (1,110) (3,530) 1,110 Dividends payable 780 Prepare the cash flows from ecerating activities section of the statement of cash flows, thing the indirect method. Use the minun sign to indicate cardhout How cash payments, decrevements Statement of Cash Flows (partial) Cashows from operating activities Atjustments to reconlenet come to net cash flow from operating activities Change current operating sets and liabilities 1001II 0 Tiet cash flow from eating activities b. Why is net cash flows from operating activities different than net income? Cash flows from operating activities is based on of accounting, whereas net income is computed using of accounting