On January 1, 2016, the Chisolm Company purchased equipment for $36,000 cash. On December 31, 2016, 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.

Net
Income Cash Flows
Operating Investing Financing
A. (45,000) (45,000) NA NA
B. (9,000) NA (36,000) NA
C. (9,000) (9,000) (27,000) NA
D. (9,000) 9,000 (27,000) NA
Option B

Option A

Option C

Option D