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	$	130,000		$	156,500
Accounts receivable		102,000			110,000
Inventory		137,000			125,000
Total current assets		369,000			391,500
Property, plant, and equipment		360,000			350,000
Less accumulated depreciation		120,000			87,500
Net property, plant, and equipment		240,000			262,500
Total assets	$	609,000		$	654,000
Accounts payable	$	80,000		$	142,000
Income taxes payable		62,000			86,000
Bonds payable		150,000			125,000
Common stock		175,000			150,000
Retained earnings		142,000			151,000
Total liabilities and stockholders equity	$	609,000		$	654,000

During the year, Ravenna paid a $15,000 cash dividend and it sold a piece of equipment for $7,500 that had originally cost $18,000 and had accumulated depreciation of $12,000. The company did not retire any bonds or repurchase any of its own common stock during the year.

Foundational 14-3

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

	Depreciation