eBook Show Me How Cash Flows from Operating Activities--Indirect Method The net income reported on the income statement for the current year was $124,600. Depreciation recorded on store equipment for the year amounted to $20,600 Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $50,460 $45,920 Accounts receivable (net) 36,180 33,930 Inventories 49,400 51,660 Prepaid expenses 5,550 4,360 Accounts payable (merchandise creditors) 47,280 43,440 Wages payable 25,840 28,380 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 outflows, cash payments, decreases in cash, or any negative adjustments Statement of Cash Flows (partial) Cash flows from operating activities Net income Adjustments to reconcile net income to net cash flow from operating activities: Depreciation Changes in current operating assets and liabilities: Increase in accounts receivable Decrease in inventories Increase in prepaid expenses Check My Work 3 more Check My Worx uses remaining Pre us Next > All work saved Emas instructor Save and El Submit Assignment for Grading Show Me How Prepaid expenses 5,550 4,360 Accounts payable (merchandise creditors) 47,280 43,440 Wages payable 25,840 28,380 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 outflows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Cash flows from operating activities: Net Income Adjustments to reconcile net income to net cash flow from operating activities: Depreciation Changes in current operating assets and liabilities: Increase in accounts receivable Q 11110 Decrease in inventories Increase in prepaid expenses Increase in accounts payable Decrease in wages payable Net cash flow from operating activities o b. Cash flows from operating activities differs from net income because it does not use the accrual basis income statement when they are earned of accounting. For example revenues are recorded on the Check My Work 3 more Check My Work uses romano Previous Next >