Page 6 QUESTION THREE B (1) (4 Marks) ( Mark Each) Assume the indirect method is used to compute cash flows from operations. For each item listed below, indicate the effect on net income in arriving at cash flows from operations by choosing one of the following code letters. (Do not write back items. Answer to be done in answer booklet and not question Paper) Cash Flows from Operating Activities Code Add to Net Income Deduct from Net Income 1. 2. 3. 4. 5. 6. 7. 8. Increase in accounts receivable Increase in inventory Decrease in prepaid expenses Decrease in accounts payable Increase in accrued liabilities Increase in income taxes payable Depreciation expenses Loss on disposal of investment