STATEMENT FROM BALANCES AND CHANGES. Wayne Sales, Inc., is a ow retailer of drinking-water filtration systems. The accompanying schedule of balances a and changes represents a comprehensive description of Wayne’s financial activities during 19x2. All sales by Wayne are credit sales, and all purchases of merchandise are on account. All expenses other than cost of goods sold and depreciation expense are paid in cash.

REQUIRED:
1. Prepare the income statement for 19x2.
2. Prepare the statement of changes in retained earnings for 19x2.
3. Prepare the statement of cash flows for 19x2.

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WAYNE SALES, INC. Beginning and Ending Balance Sheets with Changes For the Year Ended December 31, 19x2 (000 omitted) BALANCE SHEET 12/31/x1 DEBITS (CHANGES) CREDITS (CHANGES) BALANCE SHEET 12/31/x2 Cash ACCOUNT $ 190 (f) Collections from customers (j) Borrowing BALANCES) DESCRIPTION AMOUNT DESCRIPTION AMOUNT (BALANCES) (d) Other expenses 2,600 $ 620 21,940 (e) Dividends 1,100 1,500 (h) Equipment acquisition 5,000 (1) Stock issue 2,000 (i) Payment on account (k) Repayment of note... 14,910 1,400 Accounts receivable 1,140 (a) Sales revenue 22,500 (f) Collection from customers 21,940 1,700 Inventory Building and equipment (net) 1,950 (g) Purchases .. (h) Equipment 16,100 (b) Cost of goods sold .. 15,600 2,450 (e) Depreciation 15,100 acquisition Awes 5,000 expense $18,380 1,800 18,300 $23,070 Accounts payable $ 720 Notes payable Common stock (i) Payments on account 3,560 (k) Repayment of note 8,000 14,910 (g) Purchases 16,100 1,910 1,400 (j) Borrowing 1,500 3,660 (1) Stock issue 2,000 10,000 Retained earnings..... 6,100 (b) Cost of goods sold (e) Depreciation expense (d) Other expenses (e) Dividends 15,600 (a) Sales revenue 22,500 7,500 1,800 2,600 ****** 1,100 $18,380 $23,070