The cash flow statement for X Company is as follows.

Cash flows from operating activities Cash flows from investing activities

Net earnings $11,580 Capital expenditures $ (6,137)

Depreciation 4,215 Proceeds from asset sales 327

Gain on sale of assets (55) 7 Acquisitions of businesses (1,223)

Share-based compensation expense 438 Proceeds from investment sales 3,792

Deferred income taxes 772 Net change in cash from investing (3,241)

Change in accounts receivable (867) Cash flows from financing activities

Change in inventories 561 Dividends (9,314)

Change in accounts payable (983) Increase in short-term debt 4,671

Change in accrued liabilities 685 Additions to long-term debt 7,569

Net change in cash from operations 16,346 Reductions of long-term debt (4,801)

Treasury stock purchases (2,946)

Impact of stock options 2,021

Net change in cash from financing (2,800)

Net change in cash 10,305

1. Which of the following is true?

1. Cash flows from operations exceeded purchases of property, plant and equipment.
2. Net change in debt exceeded purchases of treasury stock.
3. Both a and b
4. Neither a nor b