Required:

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

3. 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?

4. 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?

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 $61,0e0 Beginning Balance Cash Accounts receivable Inventory Total current assets Property, plant, and equipment $ 72,650 55,000 62,500 51,200 68,700 180,900 186,000 190,15 175,000 43,750 131,258 $ 304,900 321,400 Less accumulated depreciation Net property, plant, and equipment Total assets 62,000 124,000 40,00e 71,200 36,700 62,500 75,000 76,000 $ 304,900 321,400 Accounts payable Income taxes payable Bonds payable Common stock Retained earnings 31,200 75,000 87,500 71,200 Total liabilities and stockholders equity During the year, Ravenna paid a $7,500 cash dividend and it sold a piece of equipment for $3,750 that had originally cost $7,800 and had accumulated depreciation of $5,200. The company did not retire any bonds or repurchase any of its own common stock during the year