Selected financial statements for Ralston Company, a sole proprietorship, are as follows:

Balance Sheet as of December 31, 20X0
Assets:
Cash	$ 30,000
Equipment	36,000
Accumulated depreciation: equipment	(11,250)
Leased property	18,000
Total assets	$ 72,750
Liabilities and owner’s equity:	$ 18,000
Lease liability	54,750
Ralston, capital	$ 72,750
Total liabilities and owners’ equity	$ 30,000

Statement of Cash Flows for the Year Ended December 31, 20X1

Additional Information:

a. During 20X1, equipment having accumulated depreciation of $4,500 was sold for a $4,000 gain.

b. A $3,550 lease payment was made in 20X1, reducing the lease liability by $2,800.

c. 20X1 depreciation expense: on leased property, $3,100; on equipment, $8,250.

d. Net income for 20X1 was $15,150.

Required:

Using the provided data, prepare Ralston’s December 31, 20X1, balance sheet.

Transcribed Image Text:

Cash flows from operating activities Collections from customers $37,500 Payments for salaries Payments for other expenses Net cash provided by operating activities (8,250) (6,750) $ 22,500 Cash flows from investing activities Sale of equipment Purchase of land 6,250 (13,400) (22,600) Purchase of investments Net cash used by investing activities (29.750) Cash flows from financing activities Payment on lease liability Issuance of long-term notes Owner withdrawals (2,800) 15,000 (12,000) Net cash from financing activities 200 Net decrease in cash $ (7,050)