OBJ. 1,2 EX 16-7 Cash flows from operating activities-indirect method The income statement disclosed the following items for the year: ash flow erating $651,300 Depreciation expense Gain on disposal of equipment Net income $ 65,000 27.500 620,000 ow (Continued) for the year are as follow 2 Chapter 16 Statement of Cash Flows Increase (Decrease) $11,200 (6,350) (1,200) The changes in the current asset and liability accounts for (4,200) 1,650 2,500 of the statement of cash fl ash flows Accounts receivable Inventory Prepaid insurance Accounts payable Income taxes payable Dividends payable 4. Prepare the cash flows from operating activities section of the using the indirect method. o activities is different from Briefly explain why net cash flows from operating activ b. net income. - to stockholders . . OB)