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	$ 126,600	$ 152,250
Accounts receivable	100,000	107,800
Inventory	134,300	122,500
Total current assets	360,900	382,550
Property, plant, and equipment	354,000	343,000
Less accumulated depreciation	118,000	85,750
Net property, plant, and equipment	236,000	257,250
Total assets	$ 596,900	$ 639,800
Accounts payable	$ 78,400	$ 139,200
Income taxes payable	60,800	83,100
Bonds payable	147,000	122,500
Common stock	171,500	147,000
Retained earnings	139,200	148,000
Total liabilities and stockholders equity	$ 596,900	$ 639,800

During the year, Ravenna paid a $14,700 cash dividend and it sold a piece of equipment for $7,350 that had originally cost $17,400 and had accumulated depreciation of $11,600. The company did not retire any bonds or repurchase any of its own common stock during the year.

6-a. If the company debited cost of goods sold and credited inventory for $980,000 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 $1,870 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 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?