Refer to all of the facts in Problem 12-1.

Required
1. Using the format in the chapter€™s appendix, prepare a statement of cash flows work sheet.
2. Prepare a statement of cash flows for 2014 using the indirect method in the Operating Activities section.
3. Did Chrisman generate sufficient cash from operations to pay for its investing activities? How did it generate cash other than from operations? Explain your answers.

Data From Problem 12.1

The following balances are available for Chrisman Company:

Bonds were retired during 2014 at face value, plant and equipment were acquired for cash, and common stock was issued for cash. Depreciation expense for the year was $35,000. Net income was reported at $26,000.

Transcribed Image Text:

December 31 2014 2013 $ 8,000 $ 10,000 Cash Accounts receivable 20,000 15,000 Inventory Prepaid rent 15,000 25,000 9,000 6,000 75,000 75,000 Land Plant and equipment Accumulated depreciation 300,000 400,000 (65,000) (30,000) Totals $462,000 $401,000 $ 10,000 $ 12,000 3,000 Accounts payable Income taxes payable Short-term notes payable Bonds payable 5,000 35,000 25,000 100,000 75,000 Common stock 200,000 150,000 Retained earnings 137,000 111,000 Totals $462,000 $401,000