Adjustments to Net IncomeIndirect Method

Lighthouse Corporation's accumulated depreciationequipment account increased by $5,900, while $3,800 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 loss of $4,500 from the sale of investments.

Reconcile a net income of $66,600 to net cash flows from operating activities.

Changes in Current Operating Assets and Liabilities

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

	Dec. 31, Year 2		Dec. 31, Year 1
Accounts receivable	$32,600		$26,700
Inventory	58,700		69,000
Accounts payable	12,600		15,500
Dividends payable	18,000		17,000

Adjust net income of $78,200 for changes in operating assets and liabilities to arrive at net cash flows from operating activities.