The comparative balance sheets and an income statement for Raceway Corporation follow: Income Statement For the Year

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

Balance Sheets As of December 31 Year 2 Year 1 Assets $ 6,300 $ 48,400 7,260 56,000 2,140 144,000 (118,000) 50,000 $189,


Income Statement
For the Year Ended December 31, Year 2
Sales ............................................................$480,000
Cost of goods sold .....................................(264,000)
Gross profit ..................................................216,000
Operating expenses
Depreciation expense .................................(11,400)
Rent expense ................................................(7,000)
Salaries expense ...........................................(95,200)
Other operating expenses ............................(76,000)
Net income ......................................................$ 26,400


Other Information
1. Purchased land for $66,000.
2. Purchased new equipment for $62,000.
3. Sold old equipment that cost $66,000 with accumulated depreciation of $56,000 for $10,000 cash.
4. Issued common stock for $30,000.


Required
Prepare the statement of cash flows for Year 2 using the indirect method.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Related Book For  book-img-for-question

Introductory Financial Accounting for Business

ISBN: 978-1260299441

1st edition

Authors: Thomas Edmonds, Christopher Edmonds

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