Refer to all of the facts in Problem 12-1A.
Required
1. Using the format in the chapter’s appendix, prepare a statement of cash flows work sheet.
2. Prepare a statement of cash flows for 2017 using the indirect method in the Operating Activ-ities section.
3. Briefly explain how Madison was able to increase its cash balance during a year in which it incurred a net loss.

PROBLEM 12-1A

The following balances are available for Madison Company:

Bonds were issued during 2017 at face value, and plant and equipment were acquired for cash. Depreciation expense for the year was $50,000. A net loss of $21,800 was reported.
Required
1. Prepare a statement of cash flows for 2017 using the indirect method in the Operating Activ-ities section.
2. Briefly explain how Madison was able to increase its cash balance during a year in which it incurred a net loss.