Ya Wen Corporation’s accumulated depreciation—equipment account increased by $8,750, while $3,250 of patent amortization

Ya Wen Corporation’s accumulated depreciation—equipment account increased by $8,750, while $3,250 of patent amortization was recognized between balance sheet dates. There were no purchases or sales of depreciable or intangible assets during the year. In addition, the income statement showed a gain of $18,750 from the sale of investments. Reconcile a net income of $175,000 to net cash flow from operating activities.


Answer:









Net income……………………………………………………………………...…………… $175,000
Adjustments to reconcile net income to net cash flow from
operating activities:
Depreciation……………………………………………………..…………………… 8,750
Amortization of patents…………………………………..…………………………… 3,250
Gain from sale of investments…………………………….……………………… (18,750)
Net cash flow from operating activities……………………..………………………… $168,250