Cash flows from (used for) operating activitiesindirect method

The net income reported on the income statement for the current year was $106,800. Depreciation recorded on store equipment for the year amounted to $41,700. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows:

Line Item Description	End of Year	Beginning of Year
Cash	$24,100	$19,700
Accounts receivable (net)	65,000	54,000
Inventories	47,200	52,000
Prepaid expenses	3,250	6,000
Accounts payable (merchandise creditors)	23,400	18,500
Wages payable	4,700	6,400

Question Content Area

a. Prepare the Cash flows from (used for) operating activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.

blank Statement of Cash Flows (partial) blank

Line Item Description	Amount	Amount
Cash flows from (used for) operating activities:
Decrease in accounts receivableDepreciationIncrease in inventoriesIncrease in wages payableNet income	$- Select -
Adjustments to reconcile net income to net cash flows from (used for) operating activities:
Decrease in accounts payableDecrease in accounts receivableDepreciationIncrease in wages payableNet income	- Select -
Changes in current operating assets and liabilities:
DepreciationIncrease in accounts receivableIncrease in inventoriesIncrease in wages payableNet income	- Select -
Decrease in accounts receivableDecrease in inventoriesDecrease in prepaid expensesIncrease in inventoriesNet income	- Select -
Decrease in accounts receivableDecrease in prepaid expensesIncrease in prepaid expensesIncrease in wages payableNet income	- Select -
Decrease in accounts payableDepreciationIncrease in accounts payableIncrease in wages payableNet income	- Select -
Decrease in accounts receivableDecrease in prepaid expensesDecrease in wages payableIncrease in wages payableNet income	- Select -
Net cash flows from operating activitiesNet cash flows used for operating activities		$- Select -

Question Content Area

b. Cash flows from operating activities differs from net income because it does not use the fill in the blank 1 of 2

accrual basiscash basis

of accounting. For example revenues are recorded on the income statement when fill in the blank 2 of 2

they are earnedcash is received

.