Ravenna Company is a merchandiser using 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 $ $110,200$ $ $132,350$

Accounts receivable $87,80094,600$

Inventory $117,900107,500$

Total current assets $315,900334,450$

Property, plant, and equipment $312,000301,000$

Less accumulated depreciation $104,00075,250$

Net property, plant, and equipment $208,000225,750$

Total assets $ $523,900$ $ $560,200$

Accounts payable $ $68,800$ $ $122,200$

Income taxes payable $53,40071,500$

Bonds payable $129,000107,500$

Common stock $150,500129,000$

Retained earnings $122,200130,000$

Total liabilities and stockholders$$ equity $ $523,900$ $ $560,200$

During the year, Ravenna paid a $$12,900$ cash dividend and sold a piece of equipment for $$6,450$ that originally cost $$15,000$ and had accumulated depreciation of $$10,000.$ The company did not retire any bonds or repurchase any of its own common stock during the year.

$1.$ What net change in cash and cash equivalents 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 $$1,290,000$ 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 are 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?