Operating Activities SectionIndirect Method

The following account balances for the noncash current assets and current liabilities of Suffolk Company are available:

	December 31
	2016		2015
Accounts receivable	$42,960		$34,800
Inventory	29,620		39,720
Prepaid rent	16,840		14,640
Totals	$89,420		$89,160
Accounts payable	$26,030		$18,510
Income taxes payable	6,030		9,550
Interest payable	14,690		11,500
Totals	$46,750		$39,560

Net income for 2016 is $37,650. Depreciation expense is $19,670. Assume that all sales and all purchases are on account.

. Other reasons for the higher amount of net cash inflow from 2. Net cash inflow from operating activities is $ operating activities are increase in accounts payable and the primary reason why it is higher than net income is depreciation and decrease in inventory December 31 2016 2015 $34,800 39,720 14,640 Accounts receivable Inventory Prepaid rent Totals Accounts payable Income taxes payable Interest payable Totals $42,960 29,620 16,840 $89,420 $26,030 6,030 14,690 $89,160 $18,510 9,550 11,500 $39,560 $46,750 Net income for 2016 is $37,650. Depreciation expense is $19,670. Assume that all sales and all purchases are on account. Required: 1. Prepare the Operating Activities section of the statement of cash flows using the indirect method. Use the minus sign to indicate cash payments, cash outflows, or decreases in cash. Suffolk Company Partial Statement of Cash Flows For the Year Ended December 31, 2016 Cash Provided by Operating Activities Net Income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense Increase in accounts receivable Decrease in inventory Increase in prepaid rent Increase in accounts payable Decrease in income taxes payable O bllllll Increase in interest payable Net cash inflow from operating activities