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Answer and Explanation:
The computation is shown below:
Sales ($28,000 + $3,000) $31,000
Less: Cost of goods sold ($13,000 + $2,000 - $3,000) -$12,000
Operating expenses($9,000 - $2,000) -$7,000
Depreciation expense -$4,000
Income tax expense ($4,000 + $1,000) -$5,000
Amortization expense -$1,000
Gain on sale of equipment $2,000
Net income $4,000
2.
Net income $4,000
Add:
Depreciation $4,000
Write-off of intangibles $1,000
Less:
Gain on sale of equipment -$2,000
Cash flow before working capital changes $7,000
Increase in accounts receivable -$3,000
Increase in inventory -$3000
Increase in accounts payable $2000
Decrease in accrued payable -$2000
Increase in deferred income taxes payable $1,000
Net Cash from Operations $2,000