Classic Automobiles of Cedar Grove, Inc., was formed on January 1, 2012. The following transactions occurred during 2012:
On January 1, 2012, Classic issued its common stock for $430,000. Early in January, Classic made the following cash payments:
a. $160,000 for equipment
b. $234,000 for inventory (six cars at $39,000 each)
c. $18,000 for 2012 rent on a store building
In February, Classic purchased four cars for inventory on account. Cost of this inventory was $192,000 ($48,000 each). Before year-end, Classic paid $76,800 of this debt. Classic uses the FIFO method to account for inventory.
During 2012, Classic sold seven vintage autos for a total of $504,000. Before year-end, Classic collected 50% of this amount.
The business employs two people. The combined annual payroll is $60,000, of which Classic owes $9,000 at year-end. At the end of the year, Classic paid income tax of $22,000.
Late in 2012, Classic declared and paid cash dividends of $18,000.
For equipment, Classic uses the straight-line depreciation method, over five years, with zero residual value.

Requirements
1. Prepare Classic Automobiles of Cedar Grove, Inc.’s income statement for the year ended December 31, 2012. Use the single-step format, with all revenues listed together and all expenses together.
2. Prepare Classic’s balance sheet at December 31, 2012.
3. Prepare Classic’s statement of cash flows for the year ended December 31, 2012. Format cash flows from operating activities by using the indirect method.