Accounting 26th Edition by Carl Warren,James Reeve,Jonathan Duchac

Exercise 26

Cash flows from operating activities-indirect method
The income statement disclosed the following items for 2016:

Balances of the current assets and current liability accounts changed between December 31, 2015, and December 31, 2016, as follows:

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 flows from operating activities is different than net income.