Question

Adjustments to Net Income—Indirect Method

Lighthouse Corporation's accumulated depreciation—equipment account increased by $4,500, while $2,900 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 $3,400 from the sale of land.

Reconcile a net income of $50,800 to net cash flow from operating activities.
$

Answer 1

Net income	50,800
Adjustments to reconcile net income to operating cash flows
Depreciation	4,500
Amortization of patent	2,900
Gain from sale of land	(3,400)
Net cash flows from operating activities	54,800