Cash Flows from Operating ActivitiesIndirect Method

The income statement disclosed the following items for the year:

Depreciation expense	$34,800
Gain on disposal of equipment	20,290
Net income	302,500

The changes in the current asset and liability accounts for the year are as follows:

	Increase (Decrease)
Accounts receivable	$5,420
Inventory	(3,080)
Prepaid insurance	(1,160)
Accounts payable	(3,670)
Income taxes payable	1,160
Dividends payable	810

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.