Question
The following balances are available for Chrisman Company: December 31 2017 2016 Cash $8,000 $10,000 Accounts receivable 20,000 15,000 Inventory 15,900 26,600 Prepaid rent 9,000
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The following balances are available for Chrisman Company:
December 31
2017 2016 Cash $8,000 $10,000 Accounts receivable 20,000 15,000 Inventory 15,900 26,600 Prepaid rent 9,000 6,000 Land 75,000 75,000 Plant and equipment 400,000 300,000 Accumulated depreciation (65,000) (30,000) Totals $462,900 $402,600 Accounts payable $12,000 $10,000 Income taxes payable 3,000 5,000 Short-term notes payable 35,000 25,000 Bonds payable 75,000 100,000 Common stock 200,000 150,000 Retained earnings 137,900 112,600 Totals $462,900 $402,600 Bonds were retired during 2017 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 $25,300.
Required:
1. Prepare a statement of cash flows for 2017 using the indirect method in the Operating Activities section. Use the minus sign to indicate cash payments, cash outflows, or decreases in cash.
Chrisman Company Statement of Cash Flows For the Year Ended December 31, 2017 Cash Flows from Operating Activities Net income $ Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense Increase in accounts receivable Decrease in inventory Increase in prepaid rent Increase in accounts payable Decrease in income taxes payable Net cash provided by operating activities $ Cash Flows from Investing Activities Acquisition of plant and equipment $ Cash Flows from Financing Activities Retirement of bonds payable $ Issuance of short-term notes payable Issuance of common stock Net cash provided by financing activities $ Net increase in cash $ Cash balance, December 31, 2016 Cash balance, December 31, 2017 $ 2. Based on its statement of cash flows, Chrisman did not generate enough cash flow from its operating activities to fund its investing activities.
In addition to operating activities, Chrisman generated cash ?
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