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 and cash equivalents	$	56,200		$	66,950
Accounts receivable		47,100			50,600
Inventory		63,200			57,500
Total current assets		166,500			175,050
Property, plant, and equipment		171,000			161,000
Less accumulated depreciation		57,000			40,250
Net property, plant, and equipment		114,000			120,750
Total assets	$	280,500		$	295,800
Accounts payable	$	36,800		$	65,500
Income taxes payable		28,700			33,800
Bonds payable		69,000			57,500
Common stock		80,500			69,000
Retained earnings		65,500			70,000
Total liabilities and stockholders equity	$	280,500		$	295,800

During the year, Ravenna paid a $6,900 cash dividend and it sold a piece of equipment for $3,450 that had originally cost $7,200 and had accumulated depreciation of $4,800. The company did not retire any bonds or repurchase any of its own common stock during the year.

10. 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?

9-a. 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?

9-b. What does this adjustment represent?