Question

Ripley Corporation’s accumulated depreciation—equipment account increased by $7,360, while $3,190 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 $4,920 from the sale of investments.

Reconcile a net income of $113,260 to net cash flow from operating activities. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtractive or negative numbers use a minus sign.

Answer 1

Solution:

Reconciliation of net income to net cash flows from operating activities
Net Income		$1,13,260
Adjustments to reconcile net income to cash flow from operating activities:
Depreciation expense	$7,360
Amortization of patent	$3,190
Gain on sale of investment	-$4,920
Total Adjustments		$5,630
Net Cash Flow From Operating Activities		$1,18,890