Cash Flows from Operating Activities,Indirect Method The income statement disclosed the following items for the year: Depreciation expense $57,600 Gain on disposal of equipment 33,600 Net income 508,000 The changes in the current asset and liability accounts for the year are as follows: Increase (Decrease) Accounts receivable Inventory Prepaid insurance $8,960 (5,120) (1,920) (6,080) 1,410 Accounts payable Income taxes payable Dividends payable 2,200 a. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Cash flows from operating activities: Net income $ 508,000 Adjustments to reconcile net income to net cash flow from operating activities: Depreciation 57,600 Gain on disposal of equipment 33,600 Changes in current operating assets and liabilities: Increase in accounts receivable 8,960 Decrease in inventory 5,120 Decrease in prepaid insurance 1,920 Decrease in accounts payable 6,080 x Increase in income taxes payable 1,410 Net cash flow from operating activities $ 525,410