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 & cash equivalents

$ $93,800$

$ $112,450$

Accounts receivable

$75,600$

$81,400$

Inventory

$101,500$

$92,500$

Total current assets

$270,900$

$286,350$

Property, plant, and equipment

$270,000$

$259,000$

Less accumulated depreciation

$90,000$

$64,750$

Net property, plant, and equipment

$180,000$

$194,250$

Total assets

$ $450,900$

$ $480,600$

Accounts payable

$ $59,200$

$ $105,200$

Income taxes payable

$46,000$

$59,900$

Bonds payable

$111,000$

$92,500$

Common stock

$129,500$

$111,000$

Retained earnings

$105,200$

$112,000$

Total liabilities and stockholders$$ equity

$ $450,900$

$ $480,600$

During the year, Ravenna paid a $$11,100$ cash dividend and it sold a piece of equipment for $$5,550$ that had originally cost $$12,600$ and had accumulated depreciation of $$8,400.$ The company did not retire any bonds or repurchase any of its own common stock during the year.

$1.$ What is the amount of the net increase or decrease in cash and cash equivalents that would be shown on the company$$s statement of cash flows?

$2.$ What net income would the company include on its statement of cash flows?

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

$4-$a$.$ If the company debited Accounts Receivable and credited Sales for $$1,110,000$ during the year, what is the total amount of credits recorded in Accounts Receivable during the year?

$4-$b$.$ What does the amount of these credits represent?

$5-$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?

$5-$b$.$ What does this adjustment represent?

$6-$a$.$ If the company debited cost of goods sold and credited inventory for $$740,000$ 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?

$6-$b$.$ What is the total amount of the debits recorded in the Accounts Payable T$-$account during the year?

$6-$c$.$ What does the amount of these debits represent?

$7-$a$.$ 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?

$7-$b$.$ What does this amount represent?

$8-$a$.$ If the company debited income tax expense and credited income taxes payable $$1,390$ during the year, what is the total amount of the debits recorded in the Income Taxes Payable account?

$8-$b$.$ What does the amount of these debits represent?

$9-$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?

$10.$ Would the operating activities section of the company$$s statement of cash flows contain an adjustment for a gain or a loss? What would be the amount and direction $(+$ or $)$ of the adjustment?