The net income reported on the income statement for the current year was $73,600. Depreciation recorded on store equipment for the year amounted to $27,400. 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.............................................$23,500..........................$18,700
Accounts receivable (net) .....................56,000...........................48,000
Merchandise inventory.........................35,500...........................40,000
Prepaid expenses.................................4,750.............................7,000
Accounts payable (merchandise creditors)..21,800...........................16,800
Wages payable....................................4,900............................5,800
a. Prepare the Cash flows from operating activities section of the statement of cash flows, using the indirect method.
b. Briefly explain why net cash flow from operating activities is different from net income.