An analysis of the annual financial statements of Conner Corporation reveals the following:

The company had a $5 million extraordinary loss from insurance proceeds received due to tornado that destroyed a factory building.

Depreciation for the year amounted $8 million.

During the year, $2 million in cash was transferred from the companys checking account into a money market fund.

Accounts receivable from customers increased by $4 million over the year.

Cash received from customers during the year amounted to $167 million.

Prepaid expenses decreased by $1 million over the year.

Dividends declared during the year amounted to $7 million; dividends paid during the year amounted to $6 million.

Accounts payable (to suppliers of merchandise) increased by $2.5 million during the year.

The liability for accrued income taxes payable amounted to $5 million at the beginning of the year and $3 million at year-end.

In the computation of net cash flows from operating activities by the indirect method, explain whether each of the above items should be added to net income , deducted from net income, or omitted from the computation. Briefly explain your reasons for each answer.