1. Show change on balance sheet

2. Prepare income statement

3. Prepare statement of cash flow

ROCKY ROAD BICYCLES, INC. Comparative Balance Sheets December 2019 and 2020 2020 2019 ASSETS Cash Accounts receivable Inventory Prepaid rent Plant assets Less accumulated depreciation $106,000 156,000 752,000 68,000 1,692,000 (562,000) $ 96,000 224,000 528,000 72,000 1,360,000 (488,000) Total assets $2,212,000 $1,792,000 ========== ========== LIABILITIES Accounts payable Wages payable Income tax payable $216,000 18,000 44,000 $112,000 20,000 36,000 Total Liabilities $ 278,000 $168,000 EQUITY Common stock Retained earnings $1,142,000 $1,000,000 792,000 624,000 $1,934,000 $1,624,000 TOTAL LIABILITIES AND EQUITY $2,212,000 1,792,000 Additional Information: 1) Rocky Road reported net income of $324,000 in 2020 2) Depreciation expense was $122,000 in 2020 3) Rocky Road sold plant assets during 2020. The plant assets originally cost $88,000, with accumulated depreciation of $48,000, and were sold for a gain of $16,000. Increase in cash from 2019 - 2020: $10,000 Dividends Paid: Beginning R/E $624,000 + NI 324,000 - Div $156,000 Ending R/E $792,000 ROCKY ROAD BICYCLES, INC. CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2020