To calculate cash flow from operating activities using the indirect method, adjustments are made to net income for non-cash items and changes in working capital. The gain on the sale of equipment (a non-operating item) should be subtracted from net income, while a decrease in accounts receivable (a working capital adjustment) should be added to net income. The correct calculation is: Net income (143) - Gain on sale of equipment (20) + Decrease in accounts receivable (38) = 161. Option A is incorrect because the decrease in accounts receivable was deducted instead of added. Option C is incorrect because the gain on sale of equipment was added instead of subtracted.