1. The Roost Department Store was formed on January 1, 2020. Additional data for the year follow: a. On January 1, 2020, company issucd common stock for $500,000. b. Early in January, company made the following cash payments: 1. For store fixtures. $54,000 2. For merchandise inventory, $270,000 3. For rent expense on a store building. $11,000 c. Later in the year, The Roost Department Store purchased merchandise inventory on account for $244,000. Before year-end, The Roost Department Store paid $144,000 of this accounts payable. d. During 2016. The Roost Department Store sold 2,300 units of merchandise inventory for $225 each. Before year-end, the company collected 90% of this amount. Cost of goods sold for the year was $320,000, and ending merchandise inventory totaled $194,000. e. The store employs three people. The combined annual payroll is $88,000, of which The Roost Department Store still owes 86,000 at year-end. f. At the end of the year, the company paid income tax of $20,000. There are no income taxes payable. g. Late in 2020 , The Roost Department Store paid cash dividends of $35,000. h. For store fixtures. The Roost Department Store uses the straight-line depreciation method, over five years, with zero residual value. Requirements 1. What is the purpose of the statement of cash flows? ( 5 points) Prepare The Roost Department Store's income statement for the year ended December 31, 2020. You can se the single-step format, with all revenues listed together and all expenses listed together. (20 points) Prepare The Roost Department Store's balance sheet at December 31, 2020. (20 points) Prepare The Roost Department Store's statement of cash flows using the indirect method for the ye led December 31, 2020. (35 points) Evaluate the ability to pay current and long-term liabilities. Use relevant ratios to evaluate. 20 points)