American Reserve Rare Coins (ARRC) was formed on January 1, 2016. Additional data for the year follow: (Click the icon to view the data.) Read the requirements. Requirement 1. What is the purpose of the statement of cash flows? The purpose of the statement of cash flows is to show where cash came from and how cash was spent during the period. Requirement 2. Prepare ARRC's income statement for the year ended December 31, 2016. Use the single-step format, with all revenues listed together and all expenses listed together. American Reserve Rare Coins Income Statement Year Ended December 31, 2016 Revenue: $ 935,000 Expenses: 487,200 447,800 Sales Revenue Cost of Goods Sold Salaries and Wages Expense Income Tax Expense Depreciation Expense Rent Expense Total Expenses Net Income $350,000 94,000 23,000 10,200 10,000 $ American Reserve Rare Coins (ARRC) was formed on January 1, 2016. Additional data for the year follow: (Click the icon to view the data.) Read the requirements. Requirement 3. Prepare ARRC's balance sheet at December 31, 2016. Assets Liabilities Current Assets: Cash Accounts Receivable Merchandise Inventory Total Current Assets Plant Assets: Store Fixtures Less: Accumulated Depreciation Total Assets American Reserve Rare Coins Balance Sheet December 31, 2016 $ 51,000 (10,200) 40,800 Current Liabilities: Accounts Payable Salaries Payable Total Current Liabilities Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity Stockholders' Equity 550,000 Data table a. On January 1, 2016, ARRC issued no par common stock for $550,000. b. Early in January, ARRC made the following cash payments: 1. For store fixtures, $51,000 2. For merchandise inventory, $280,000 3. For rent expense on a store building, $10,000 c. Later in the year, ARRC purchased merchandise inventory on account for $236,000. Before year-end, ARRC paid $156,000 of this account payable. d. During 2016, ARRC sold 2,200 units of merchandise inventory for $425 each. Before year-end, the company collected 85% of this amount. Cost of goods sold for the year was $350,000, and ending merchandise inventory totaled $166,000. e. The store employs three people. The combined annual payroll is $94,000, of which ARRC still owes $3,000 at year-end. f. At the end of the year, ARRC paid income tax of $23,000. There are no income taxes payable. g. Late in 2016, ARRC paid cash dividends of $34,000. h. For store fixtures, ARRC uses the straight-line depreciation method, over five years, with zero residual value. Print Done I X