The following changes took place last year in Pavolik Companys balance sheet accounts:

Asset and Contra-Asset Accounts				Liabilities and Stockholders' Equity Accounts
Cash	$	16	D	Accounts payable	$	46	I
Accounts receivable	$	165	I	Accrued liabilities	$	4	D
Inventory	$	70	D	Income taxes payable	$	19	I
Prepaid expenses	$	20	I	Bonds payable	$	128	I
Long-term investments	$	17	D	Common stock	$	47	D
Property, plant, and equipment	$	163	I	Retained earnings	$	54	I
Accumulated depreciation	$	49	I

D = Decrease; I = Increase.

Long-term investments that cost the company $17 were sold during the year for $27 and land that cost $26 was sold for $20. In addition, the company declared and paid $30 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. Pavolik did not retire any bonds during the year or issue any new common stock.

The companys income statement for the year follows:

Sales					$	660
Cost of goods sold						400
Gross margin						260
Selling and administrative expenses						184
Net operating income						76
Nonoperating items:
Loss on sale of land	$	(6	)
Gain on sale of investments		10				4
Income before taxes						80
Income taxes						24
Net income					$	56

The companys beginning cash balance was $123 and its ending balance was $107.

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.)

Pavolik Company
Direct Method of Determining the Net Cash flows from Operating activities
Net income	$294,000
Adjustments to a cash basis:
		$294,000
Adjustments to a cash basis:
		0
Selling and administrative expenses
Adjustments to a cash basis:
		0
Income taxes
Adjustments to a cash basis:
		0
		$294,000