The following changes took place last year in Herald Company%u2019s balance sheet accounts:

Asset and Contra-Asset Accounts Liabilities and Equity Accounts

Cash $ 20 I Accounts payable $ 20 I

Accounts receivable $ 10 D Accrued liabilities $ 10 D

Inventory $ 30 I Income taxes payable $ 15 I

Prepaid expenses $ 5 D Bonds payable $ 20 D

Long-term investments $ 30 D Common stock $ 40 I

Property, plant, and equipment $ 120 I Retained earnings $ 40 I

Accumulated depreciation $ 40 I

D = Decrease; I = Increase.

Long-term investments that had cost the company $50 were sold during the year for $45, and land that had cost $30 was sold for $70. In addition, the company declared and paid $35 in cash dividends during the year. Besides the sale of land, no other sales or retirements of plant and equipment took place during the year. Herald did not issue any bonds during the year or repurchase any of its own stock.

The company%u2019s income statement for the year follows:

Sales $ 600

Cost of goods sold 250

Gross margin 350

Selling and administrative expenses 280

Net operating income 70

Nonoperating items:

Loss on sale of investments $ (5)

Gain on sale of land 40 35

Income before taxes 105

Income taxes 30

Net income $ 75

The company%u2019s beginning cash balance was $100 and its ending balance was $120.

Required:

Use the direct method to convert the company's income statement to a cash basis. (Adjustment amounts that are to be deducted should be indicated with a minus sign. Omit the "$" sign in your response.)

Herald Company%u2019s

Direct Method of Determining the Net Cash flows from Operating activities

Sales $

Adjustments to a cash basis:

$

Cost of goods sold

Adjustments to a cash basis:

Selling and administrative expenses

Adjustments to a cash basis:

Income taxes

Adjustments to a cash basis:

Net cash operating activities $