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

Asset and Contra-Asset Accounts				Liabilities and Equity Accounts
Cash	$	46	I	Accounts payable	$	23	I
Accounts receivable	$	13	D	Accrued liabilities	$	9	D
Inventory	$	26	I	Income taxes payable	$	11	I
Prepaid expenses	$	5	D	Bonds payable	$	17	D
Long-term investments	$	29	D	Common stock	$	43	I
Property, plant, and equipment	$	148	I	Retained earnings	$	47	I
Accumulated depreciation	$	45	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 $71. 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 companys income statement for the year follows:

Sales			$	602
Cost of goods sold				248
Gross margin				354
Selling and administrative expenses				279
Net operating income				75
Nonoperating items:
Loss on sale of investments	$	(5)
Gain on sale of land		41		36
Income before taxes				111
Income taxes				29
Net income			$	82

The companys beginning cash balance was $100 and its ending balance was $146.

Required:

Use the direct method to convert the company's income statement to a cash basis. (Adjustment amounts that are to be deducted and Net cash "used in" operating activities should be indicated with a minus sign and all other amounts as positive values.)

Herald Companys Direct Method of Determining the Net Cash flows from Operating activities
Sales	$
Adjustments to a cash basis:
(Click to select)Loss on sale of investmentsDecrease in accrued liabilitiesIncrease in inventoryIncrease in income taxes payableIncrease in prepaid expensesIncrease in accounts receivableIncrease in accrued liabilitiesDecrease in accounts receivableGain on sale of landIncrease in accounts payableDecrease in accounts payableDecrease in prepaid expensesDecrease in inventoryDepreciationDecrease in income taxes payable		$
Cost of goods sold
Adjustments to a cash basis:
(Click to select)Increase in accounts payableDecrease in accrued liabilitiesIncrease in accrued liabilitiesDecrease in inventoryIncrease in prepaid expensesGain on sale of landIncrease in accounts receivableDepreciationIncrease in inventoryDecrease in accounts payableDecrease in accounts receivableLoss on sale of investmentsIncrease in income taxes payableDecrease in prepaid expensesDecrease in income taxes payable
(Click to select)Increase in accounts receivableIncrease in accounts payableDecrease in income taxes payableDecrease in accrued liabilitiesDecrease in accounts payableGain on sale of landIncrease in income taxes payableIncrease in inventoryIncrease in accrued liabilitiesDepreciationLoss on sale of investmentsDecrease in inventoryIncrease in prepaid expensesDecrease in accounts receivableDecrease in prepaid expenses
Selling and administrative expenses
Adjustments to a cash basis:
(Click to select)Loss on sale of investmentsDecrease in accounts receivableIncrease in inventoryDecrease in accrued liabilitiesDecrease in inventoryDecrease in income taxes payableDepreciationGain on sale of landIncrease in income taxes payableDecrease in accounts payableIncrease in accounts receivableIncrease in accounts payableDecrease in prepaid expensesIncrease in accrued liabilitiesIncrease in prepaid expenses
(Click to select)Increase in inventoryDecrease in income taxes payableDecrease in accounts receivableGain on sale of landIncrease in income taxes payableLoss on sale of investmentsDepreciationDecrease in prepaid expensesDecrease in accrued liabilitiesIncrease in prepaid expensesIncrease in accounts receivableDecrease in accounts payableIncrease in accounts payableIncrease in accrued liabilitiesDecrease in inventory
(Click to select)Loss on sale of investmentsDecrease in prepaid expensesDecrease in inventoryIncrease in inventoryIncrease in accrued liabilitiesIncrease in prepaid expensesIncrease in accounts receivableDecrease in income taxes payableDepreciationIncrease in accounts payableDecrease in accounts payableDecrease in accrued liabilitiesDecrease in accounts receivableIncrease in income taxes payableGain on sale of land
Income taxes
Adjustments to a cash basis:
(Click to select)Increase in inventoryDecrease in income taxes payableDecrease in inventoryIncrease in income taxes payableIncrease in prepaid expensesGain on sale of landDecrease in accounts receivableDecrease in accounts payableDepreciationIncrease in accounts receivableLoss on sale of investmentsDecrease in prepaid expensesIncrease in accounts payableDecrease in accrued liabilitiesIncrease in accrued liabilities
Net cash (Click to select)provided byused for operating activities		$

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