Ravenna Company is a merchandiser that uses the indirect method to prepare the operating activities section of its statement of cash flows. Its balance sheet for this year is as follows:

	Ending Balance			Beginning Balance
Cash	$	77,400		$	92,550
Accounts receivable		63,400			68,200
Inventory		85,100			77,500
Total current assets		225,900			238,250
Property, plant, and equipment		228,000			217,000
Less accumulated depreciation		76,000			54,250
Net property, plant, and equipment		152,000			162,750
Total assets	$	377,900		$	401,000
Accounts payable	$	49,600		$	88,200
Income taxes payable		38,600			48,300
Bonds payable		93,000			77,500
Common stock		108,500			93,000
Retained earnings		88,200			94,000
Total liabilities and stockholders equity	$	377,900		$	401,000

During the year, Ravenna paid a $9,300 cash dividend and it sold a piece of equipment for $4,650 that had originally cost $10,200 and had accumulated depreciation of $6,800. The company did not retire any bonds or repurchase any of its own common stock during the year.

1. What net income would the company include on its statement of cash flows?

a. How much depreciation would the company add to net income on its statement of cash flows?

2-a. If the company debited Accounts Receivable and credited Sales for $930,000 during the year, what is the total amount of credits recorded in Accounts Receivable during the year?

2-b. What does the amount of these credits represent?

3-a. What is the amount and direction (+ or ) of the accounts receivable adjustment to net income in the operating activities section of the statement of cash flows?

3-b. What does this adjustment represent?

3-c. If the company debited cost of goods sold and credited inventory for $620,000 during the year, what is the total amount of inventory purchases recorded on the debit side of the Inventory T-account and the credit side of the Accounts Payable T-account?

3-d. What is the total amount of the debits recorded in the Accounts Payable T-account during the year?

3-e. What does the amount of these debits represent?

4.What is the combined amount and direction (+ or ) of the inventory and accounts payable adjustments to net income in the operating activities section of the statement of cash flows?

a. What does this amount represent?

b. If the company debited income tax expense and credited income taxes payable $1,150 during the year, what is the total amount of the debits recorded in the Income Taxes Payable account?

c. What does the amount of these debits represent?

d. What is the amount and direction (+ or ) of the income taxes payable adjustment to net income in the operating activities section of the statement of cash flows?

e. What does this adjustment represent?

5. Would the operating activities section of the companys statement of cash flows contain an adjustment for a gain or a loss? What would be the amount and direction (+ or ) of the adjustment?

6. What is the amount of net cash provided by (used in) operating activities in the companys statement of cash flows?

7. What is the amount of gross cash outflows reported in the investing section of the companys statement of cash flows?

8. What is the companys net cash provided by (used in) investing activities?

9.What is the amount of gross cash inflows reported in the financing section of the companys statement of cash flows?

10. What is the companys net cash provided by (used in) financing activities?