Reference no: EM13956493

The following financial statements were furnished by Patton Company:

Patton Company
Income Statement
For the Year Ended November 30, 2011
Sales .................$40,700
Less cost of goods sold ...........(13,200)
Gross margin ...............27,500
Less wage expense ............(10,600)
Less other operating expenses .......(1,130)
Less depreciation expense ..........(3,560)
Net income (loss) ............$12,210
In 2011, Patton purchased equipment for $25,000 and sold some equipment for its book value (i.e., no gain or loss resulted).

Required:

a. Prepare a statement of cash flows using the indirect method.

b. Prepare the operating portion of Patton's cash flow statement using the direct method.