Assume that a company uses a work sheet as illustrated in Exhibit 12-16 to prepare its statement of cash flows and that it uses the indirect method in the Operating Activities section of the statement. For each of the following changes in balance sheet accounts, indicate in one of the three columns whether it is an addition (A) or a deduction (D). Assume that the change in (2) and (6) includes a corresponding change incash.

Type of Activity Balance Sheet Change 1. Accounts receivable increased 2. Land increased 3. Inventory decreased 4. Accounts payable decreased 5. Income taxes payable increased 6. Capital stock increased Operating Investing Financing