The 2014 comparative balance sheet and income statement of Depot Supply Corp. follow. Depot had nonon-cash investing and financing transactions during 2014.

During theyear, there were no sales of land orequipment, no issuance of notes payable, and no repurchase of shares transactions.

	Depot Supply Corp.
	Comparative Balance Sheet
	As at December 31, 2014 and 2013
		December 31,		Increase
		2014	2013	(Decrease)
Current assets:
Cash and cash equivalents. . . . . . . . . . . .		$17,700	$5,700	$12,000
Accounts receivable. . . . . . . . . . . . . . . . .		42,500	45,000	(2,500)
Inventories. . . . . . . . . . . . . . . . . . . . . . .		83,400	87,500	(4,100)
Prepaid expenses. . . . . . . . . . . . . . . . . .		2,300	1,000	1,300
Property, plant, and equipment:
Land. . . . . . . . . . . . . . . . . . . . . . . . . . . .		89,200	60,600	28,600
Equipment, net. . . . . . . . . . . . . . . . . . . .		53,800	49,500	4,300
Total assets. . . . . . . . . . . . . . . . . . . . . . . . . .		$288,900	$249,300	$39,600
Current liabilities:
Accounts payable. . . . . . . . . . . . . . . . . .		$35,300	$33,800	$1,500
Salary payable. . . . . . . . . . . . . . . . . . . . .		1,800	6,400	(4,600)
Other accrued liabilities. . . . . . . . . . . . . .		22,600	23,700	(1,100)
Long-term liabilities:
Notes payable. . . . . . . . . . . . . . . . . . . . .		75,000	102,000	(27,000)
Shareholders' equity:
Common shares. . . . . . . . . . . . . . . . . . .		88,000	64,700	23,300
Retained earnings. . . . . . . . . . . . . . . . . .		66,200	18,700	47,500
Total liabilities and shareholders' equity. . . . . . .		$288,900	$249,300	$39,600

		Depot Supply Corp.
		Income Statement
		For the Year Ended December 31, 2014
	Revenues:
		Sales revenue. . . . . . . . . . .		$439,000
	Expenses:
		Cost of goods sold. . . . . . . .	$185,800
		Salary expense. . . . . . . . . .	76,200
		Depreciation expense. . . . . .	4,400
		Other operating expense. . . .	10,000
		Interest expense. . . . . . . . .	25,000
		Income tax expense. . . . . . .	28,800
		Total expenses. . . . . . . . . .		330,200
		Net income. . . . . . . . . . . . .		$108,800

Requirement 1. Prepare the 2014 statement of cash flows, formatting operating activities by using the indirect method.

Start by completing the cash flows from operating activities. Then, continue with completing the investing and financing activities sections. Finally, determine the net increase in cash. (Use a minus sign or parentheses for subtracting numbers that are typically shown enclosed in parentheses in a statement of cashflows.)

	Depot Supply Corp.
	Statement of Cash Flows
	For the Year Ended December 31, 2014
	Cash flows from operating activities:
	Net income
	Adjustments to reconcile net income to
	net cash provided by operating activities:
	Depreciation
	Decrease in accounts receivable
	Decrease in inventories
	Increase in prepaid expenses
	Increase in accounts payable
	Decrease in salary payable
	Decrease in other accrued liabilities
	Net cash provided by operating activities
	Cash flows from investing activities:
	Purchase of land
	Purchase of equipment
	Net cash used for investing activities

	Cash flows from financing activities:
	Payment of dividends
	Payment of note payable
	Issuance of common shares
	Net cash used for financing activities
	Net increase in cash
	Cash balance, December 31, 2013
	Cash balance, December 31, 2014

Requirement 2. How will what you learned in this problem help you evaluate an investment?

A) Learn how companies prepare the statement of cash flows

B) Learn how operating activities, investing activities, and financing activities generate cash receipts and cash payments

C) Both A and B

D) None of the above