Instructions: Prepare the cash flows from operating activities section of the s

Instructions: Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method. 1. Why are an increase in accounts payable and a decrease in prepaid expenses both added to net income? 2. The net income reported on the income statement of Hunter Inc. for the current year was $150000. Depreciation recorded on the building and equipment
amounted to $45000 for the year. Balances of the current assets and current liability accounts at the beginning and end of the year are as follows:Cash
End of year $42875
Beginning of year $36250Accounts Receivables
End of year 147500
Beginning of year 137500Inventories
End of year 109375
Beginning of year 93750Prepaid Expenses
End of year 9250
Beginning of year 11875Accounts Payable
End of year 57000
Beginning of year 40000Salaries Payable
End of year 7625
Beginning of year 10625