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REQUIREMENT 2 Assuming a company uses the indirect method in the operating activities section of the statement of cash ows, answer the following questions. 1. Why is an increase in accounts receivable a subtraction when adjusting from net income to operating cash flow? 2. Why is a decrease in accounts payable a subtraction when adjusting from net income to operating cash ow'? 3. Why is stock-based compensation an addition when adjusting from net income to operating cash oW? REQUIREMENT 3 Wilson Corporation reported $85,000 in net income during 20Y3. Depreciation expense was $14,000. The following current assets and liabilities also changed during the year: Increase in AIR $6,000 Decrease in Inventory $5,000 Increase in Prepaid Rent $2,000 Decrease in A/P $7,000 Decrease in Income Taxes Payable $1,000 Net cash from operating activities is (Circle the correct answer): A. $88,000 B. $92,000 C. $102,000 D. $114,000