Cruise America Motorhomes, Inc. (CAM), was formed on January 1, 20X8, when the company issued its common stock for $200,000. Early in January, CAM made the following cash payments:
a. For store fixtures, $50,000
b. For inventory 2 motorhomes at $60,000 each, a total of $120,000
c. For rent on a store building, $12,000
In February, CAM purchased 3 motorhomes on account. Cost of this inventory was $160,000 ($53,333.33 each). Before year end, CAM paid $140,000 of this debt. CAM uses the FIFO method to account for inventory.
During 20X8, CAM sold 4 motorhomes for a total of $560,000. Before year end, CAM collected 90% of this amount.
The store employs 3 people. The combined annual payroll is $90,000, of which CAM owes $3,000 at year end. At the end of the year, CAM paid income tax of $64,000.
Late in 20X8, CAM declared and paid cash dividends of $40,000.
For store fixtures, CAM uses the straight-line depreciation method, over 5 years, with zero residual value.
Required
1. Prepare Cruise America Motorhomes, Inc.'s, income statement for the year ended
December 31, 20X8. Use the single-step format, with all revenues listed together and all expenses together.
2. Prepare CAM's balance sheet at December 31, 20X8.
3. Prepare CAM's statement of cash flows for the year ended December 31, 20X8. Format cash flows from operating activities by the indirect method.