Question

In: Accounting

The comparative balance sheets and an income statement for Raceway Corporation follow. Balance Sheets As of...

The comparative balance sheets and an income statement for Raceway Corporation follow.

Balance Sheets
As of December 31
Year 2 Year 1
Assets
Cash $ 71,084 $ 41,770
Accounts receivable 30,368 22,270
Merchandise inventory 156,692 172,360
Prepaid rent 2,460 4,920
Equipment 260,140 287,240
Accumulated depreciation (148,440 ) (239,840 )
Land 192,720 80,320
Total assets $ 565,024 $ 369,040
Liabilities
Accounts payable (inventory) $ 61,746 70,040
Salaries payable 33,367 28,600
Stockholders’ equity
Common stock, $50 par value 251,500 198,500
Retained earnings 218,411 71,900
Total liabilities and equity $ 565,024 $ 369,040
Income Statement
For the Year Ended December 31, Year 2
Sales $ 1,499,000
Cost of goods sold (796,669 )
Gross profit 702,331
Operating expenses
Depreciation expense (21,400 )
Rent expense (24,340 )
Salaries expense (251,660 )
Other operating expenses (258,420 )
Net income $ 146,511


Other Information

  1. Purchased land for $112,400.
  2. Purchased new equipment for $104,900.
  3. Sold old equipment that cost $132,000 with accumulated depreciation of $112,800 for $19,200 cash.
  4. Issued common stock for $53,000.


Required
Prepare the statement of cash flows for Year 2 using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

Solutions

Expert Solution

ekkarill92 answered 1 year ago
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