P11-69B. (Learning Objectives 2, 3, 4, 5: Preparing an Income Statement, Balance Sheet, and statement of cash flows—indirect method) Slick Automobiles of Dubai, Inc., was formed on January 1, 20X6. The following transactions occurred during 20X6:

On January 1, 20X6, Slick issued its shares for €350,000. Early in January, Slick made the following cash payments:

a. €150,000 for equipment

b. €180,000 for inventory (five cars at €35,000 each)

c. €16,000 for 20X6 rent on a store building In February, Slick purchased six cars for inventory on account. Cost of this inventory was

€288,000 (€48,000 each). Before year-end, Slick paid €198,400 of this debt. Slick uses the FIFO method to account for inventory.

During 20X6, Slick sold six vintage autos for a total of €438,000. Before year-end, Slick collected 90% of this amount.

The business employs three people. The combined annual payroll is €90,000, of which Slick owes €6,000 at year-end. At the end of the year, Slick paid income tax of €15,000.

Late in 20X6, Slick declared and paid cash dividends of €17,000.

For equipment, Slick uses the straight-line depreciation method, over five years, with zero residual value.

Requirements 1. Prepare Slick Automobiles of Dubai, Inc.’s Income Statement for the year ended December 31, 20X6.

2. Prepare Slick’s Balance Sheet at December 31, 20X6.

3. Prepare Slick’s statement of cash flows for the year ended December 31, 20X6. Format cash flows from operating activities by using the indirect method.