Which of the following statements are true regarding gains and losses of fixed assets when preparing the operating activity section of the statement of cash flows using the indirect method?
1) Gains on the sale of fixed assets are added to net income in the operating activity section.
2) Losses on the sale of fixed assets are subtracted from net income in the operating activity section.
3) Depreciation expense is added back to net income in the operating activity section.
4) Amortization expense is subtracted from net income in the operating activity section.