Tissier Rare Collectibles (TRC) was formed on January 1, 2025. Additional data for the year follows: 

a. On January 1, 2025, TRC issued common stock for $400,000. 

b. Early in January, TRC made the following cash payments: 

1. For store fixtures, $45,000 

2. For merchandise inventory, $310,000 

3. For rent expense on the store building, $20,000

c. Later in the year, TRC purchased merchandise inventory on account for $237,000. Before year-end, TRC paid $157,000 of this accounts payable. 

d. During 2025, TRC sold 3,100 units of merchandise inventory for $325 each. Before year-end, the company collected 85% of this amount. Cost of goods sold for the year was $280,000, and ending merchandise inventory totaled $267,000. 

e. The store employs three people. The combined annual payroll is $82,000, of which TRC still owes $7,000 at year-end.  

f. At the end of the year, TRC paid income tax of $20,000. There are no income taxes payable. 

g. Late in 2025, TRC paid cash dividends of $38,000. 

h. For store fixtures, TRC uses the straight-line depreciation method, over five years, with zero residual value.

Requirements 

1. Prepare TRC’s income statement for the year ended December 31, 2025. Use the single-step format, with all revenues listed together and all expenses listed together. 

2. Prepare TRC’s balance sheet at December 31, 2025. 

3. Prepare TRC’s statement of cash flows for the year ended December 31, 2025. Format cash flows from operating activities by the direct method.