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.

1. What is the amount of the net increase or decrease in cash and cash equivalents that would be shown on the companys 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 $1,410,000 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?