A catering company reported the following financial statements and information for two successive years:

Additional financial information:

1. In Year 0007, the building that was previously rented was purchased for $150,000. The company paid $10,000 cash and assumed a longterm mortgage for $140,000. Depreciation on the building is $7,500 for Year 0007. At the end of Year 0007, $7,100 of the mortgage payable was reclassified as a current liability payable in Year 0008.

2. New stock was issued for cash, 200 shares at $50.00 each.

The equipment account, and its accumulated depreciation account, is shown below:

Calculate the changes in working capital and prepare the company’s statement of sources (inflows) and uses (outflows) for the year ended December 31, 0008.LO1

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Statement of Retained Earnings For the Year Ended December 31, 0007 Retained earnings December 31, 0007 Operating loss for Year 0008 Retained earnings December 31, 0008 $29,900 ( 8,100) $21,800