Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the current year was $131,800. Depreciation recorded on store equipment for the year amounted to $21,700. 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 $51,270   $47,170   Accounts receivable (net) 36,760   34,860   Merchandise inventory 50,190   53,070   Prepaid expenses 5,640   4,480   Accounts payable (merchandise creditors) 48,040   44,620   Wages payable 26,250   29,150   a.  Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.   Statement of Cash Flows (partial)

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Cash Flows from Operating Activities—Indirect Method

The net income reported on the income statement for the current year was $131,800. Depreciation recorded on store equipment for the year amounted to $21,700. 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 $51,270   $47,170  
Accounts receivable (net) 36,760   34,860  
Merchandise inventory 50,190   53,070  
Prepaid expenses 5,640   4,480  
Accounts payable (merchandise creditors) 48,040   44,620  
Wages payable 26,250   29,150  

a.  Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.

 
Statement of Cash Flows (partial)
 
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