Cruise Canada Motorhomes Inc. (CCM) was formed on January 1, 2020, when the company issued its common shares for \(\$ 200,000\). Early in January, CCM made the following cash payments:

a. For showroom fixtures, \(\$ 50,000\)

b. For inventory, two motorhomes at \(\$ 60,000\) each, a total of \(\$ 120,000\)

c. For rent on a store building, \(\$ 12,000\)

In February, CCM purchased three motorhomes on account. Cost of this inventory was \(\$ 160,000\) ( \(\$ 53,333.33\) each). Before year-end, CCM paid \(\$ 140,000\) of this debt. CCM uses the FIFO method to account for inventory.

During 2020, CCM sold four motorhomes for a total of \(\$ 560,000\). Before year-end, CCM collected \(90 \%\) of this amount.

The store employs three people. The combined annual payroll is \(\$ 90,000\), of which CCM owes \(\$ 3,000\) at year-end. At the end of the year, CCM paid income tax of \(\$ 64,000\).

Late in 2020, CCM declared and paid cash dividends of \(\$ 40,000\).

For showroom fixtures, CCM uses the straight-line depreciation method over five years with zero residual value.

{Requirements}

1. Prepare CCM's income statement for the year ended December 31, 2020. Use the single step format, with all revenues listed together and all expenses listed together.

2. Prepare CCM's balance sheet at December 31, 2020 3. Prepare CCM's statement of cash flows for the year ended December 31, 2020. Format cash flows from operating activities by the indirect method.

4. Comment on the business performance based on the statement of cash flows.