Read the requirements.

Requirement $1.$ Prepare Classic's income statement for the year ended December $31,2021.$ Use the single$-$step format, with all revenues listed together and all expenses together.

Classic Motors, Inc.

Income Statement

Year Ended December $31,2021$

Revenue:

Requirements

Prepare Classic's income statement for the year ended December $31,2021.$

Use the single$-$step format, with all revenues listed together and all expenses

together.

Prepare Classic's balance sheet at December $31,2021.$

Prepare Classic's statement of cash flows for the year ended December $31,$

Format cash flows from operating activities using the indirect method.

On January $1,2021,$ Classic issued its common stock for $$510,000.$ Early in January,

Classic made the following cash payments:

a$.$ $$220,000$ for equipment

b$.$ $$243,000$ for inventory $($nine cars at $$27,000$ each$)$

c$.$ $$25,000$ for $2021$ rent on a store building

In February, Classic purchased three cars for inventory on account. The cost of this

inventory was $$117,000($ $$39,000$ per car$).$ Before year$-$end, the company paid off

$$58,500$ of this debt. The company uses the first$-$in$,$ first$-$out $($FIFO$)$ method to account

for its inventory.

During $2021,$ Classic sold eleven autos for a total of $$649,000.$ Before year$-$end, it

had collected $90\%$ of this amount.

The business employs two people. The combined annual payroll is $$151,000,$ of

which Classic owes $$3,000$ at year$-$end. At the end of the year, the company paid income

taxes of $$22,000.$

Late in $2021,$ Classic declared and paid cash dividends of $$15,000.$

For equipment, Classic uses the straight$-$line depreciation method, over five years,

with zero residual value.