Answer
Net income is adjusted as show below:
Cash flows from operating activities
Net income ..................................................................90,000
Adjustments to reconcile net income to net
cash presented by operating activities:
Depreciation expense.................................................. 14,000
Premium amortization................................................. (5,000)
Net cash presented by operating activities ................99,000
Work Step by Step
We less the premium amortization and add the depreciation expense to obtain the net amount from operating activities.
