Cash Flows from Operating Activities-Indirect Method The income statement disclosed the following items for year: Depreciation expense Gain on disposal of equipment $37,900 22,100 287,700 Net income The changes in the current asset and liability accounts for the year are as follows: Accounts receivable Inventory Increase (Decrease) $5,900 (3,360) (1,260) (4,000) 1,260 880 Prepaid insurance Accounts payable Income taxes payable Dividends payable 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) For the year ended xocx Cash flows from operating activities: Adjustments to reconcile net income to net cash flow from operating activities: Changes in current operating assets and liabilities: Net cash flow from operating activities b. Why is net cash flows from operating activities different than net income? of accounting, whereas net income is computed using Cash flows from operating activities is based on of accounting