1. Answer the following:

- Lighthouse Corporation's accumulated depreciationequipment account increased by $7,800, while $5,100 of patent amortization was recognized between balance sheet dates. There were no purchases or sales of depreciable or intangible assets during the year. In addition, the income statement showed a gain of $6,000 from the sale of investments.

Reconcile a net income of $89,200 to net cash flows from operating activities.

- Covington Corporation's comparative balance sheet for current assets and liabilities was as follows:

	Dec. 31, Year 2		Dec. 31, Year 1
Accounts receivable	$23,000		$28,400
Inventory	67,300		60,100
Accounts payable	8,500		10,000
Dividends payable	23,000		22,000

Adjust net income of $99,600 for changes in operating assets and liabilities to arrive at net cash flows from operating activities.

- Yeoman Inc. reported the following data:

Net income	$385,300
Depreciation expense	64,600
Loss on disposal of equipment	38,700
Increase in accounts receivable	25,700
Increase in accounts payable	12,000

Prepare the Cash Flows from (used for) 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.

Yeoman Inc. Statement of Cash Flows (partial)

Cash flows from (used for) operating activities:
Decrease in accounts payableDepreciation expenseGain on disposal of equipmentIncrease in accounts receivableNet income	$- Select -
Adjustments to reconcile net income to net cash flows from (used for) operating activities:
Decrease in accounts payableDepreciation expenseGain on disposal of equipmentIncrease in accounts payableIncrease in accounts receivable	- Select -
Decrease in accounts receivableGain on disposal of equipmentIncrease in accounts payableIncrease in accounts receivableLoss on disposal of equipment	- Select -
Changes in current operating assets and liabilities:
Decrease in accounts receivableDepreciation expenseGain on disposal of equipmentIncrease in accounts receivableLoss on disposal of equipment	- Select -
Decrease in accounts payableDepreciation expenseGain on disposal of equipmentIncrease in accounts payableLoss on disposal of equipment	- Select -
Net cash flows from operating activities		$fill in the blank 11

- Easterly Corporation purchased land for $195,000. Later in the year, the company sold a different piece of land with a book value of $123,000 for $108,000.

How are the effects of these transactions reported on the statement of cash flows? Use the minus sign to indicate cash outflows, cash payments, decreases in cash and for any adjustments, if required. If a transaction has no effect on the statement of cash flows, select "No effect" from the drop down menu and leave the amount box blank.

Transactions	Action	Amount
Gain or loss on sale of land	Added to net incomeDeducted from net incomeNo effectPart of cash flows from financing activities Part of cash flows from investing activities	$fill in the blank 2
Cash received from sale of land	Added to net incomeDeducted from net incomeNo effectPart of cash flows from financing activities Part of cash flows from investing activities	$fill in the blank 4
Cash paid for purchase of land