16-2 16-03

Changes in Current Operating Assets and LiabilitiesIndirect Method

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

	Dec. 31, Year 2		Dec. 31, Year 1
Accounts receivable	$15,700		$13,300
Inventory	58,700		67,500
Accounts payable	13,900		16,200
Dividends payable	22,000		21,000

Adjust net income of $97,300 for changes in operating assets and liabilities to arrive at net cash flow from operating activities.