I know in order to find adjustments to net income using the indirect method you begin with the net income and add your depreciation, and amortization of patents. Then you subtract the Gain of sale on the land, then you'll have your net income.. However, when I compute this problem it still says I am incorrect. Ripley Corporation's accumulated depreciation-equipment account increased by $15,325 while $3,800 of patent amortization was recognized betweenbalance sheet dates. There were no purchases or sales of depreciable or intangible assets during the year. In addition, the income statement showed again of $22,420 from the sale of investments.Reconcile a net income of $286,900 to net cash flow from operating activities.

Answered: Ripley Corporation's accumulated…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter15: Statement Of Cash Flows

Section: Chapter Questions

Problem 2BE

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I know in order to find adjustments to net income using the indirect method you begin with the net income and add your depreciation, and amortization of patents. Then you subtract the Gain of sale on the land, then you'll have your net income.. However, when I compute this problem it still says I am incorrect.

Ripley Corporation's accumulated depreciation-equipment account increased by $15,325 while $3,800 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 $22,420 from the sale of investments.
Reconcile a net income of $286,900 to net cash flow from operating activities.

Expert Solution

Step 1

Cash flow from the operating activity is part of the cash flow statement. It indicates the cash inflow and outflow from the operation. It can be prepared using the direct and indirect methods.

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