On January 1,Year 1,Chisolm Company purchased equipment for $36,000 cash.On December 31,Year 1,depreciation of $9,000 was recorded.Which of the following correctly shows the combined effect of these two events on the income statement and statement of cash flows? Chisolm uses the direct method.
$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $Cash Flows
Net Income$\quad $$\quad $$\quad $Operating $\quad $ $\quad $Investing $\quad $$\quad $$\quad $$\quad $$\quad $Financing

Question

On January 1,Year 1,Chisolm Company purchased equipment for $36,000 cash.On December 31,Year 1,depreciation of $9,000 was recorded.Which of the following correctly shows the combined effect of these two events on the income statement and statement of cash flows? Chisolm uses the direct method.
$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $Cash Flows
Net Income$\quad $$\quad $$\quad $Operating $\quad $ $\quad $Investing  $\quad $$\quad $$\quad $$\quad $$\quad $Financing

Quizplus · Accepted Answer

The purchase of equipment for $36,000 cash is reported as a cash outflow in the investing activities section of the statement of cash flows.Depreciation expense of $9,000 decreases net income,but this noncash expense does not impact cash flows.

On January 1,Year 1,Chisolm Company Purchased Equipment for $36,000 Cash \quad

On January 1,Year 1,Chisolm Company Purchased Equipment for $36,000 Cash $\quad$