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? Data table a. On January 1, 2016, ARRC issued no par common stock for $450,000. b. Early in January, ARRC made tho following cash payments: 1. For store fixtures, $49,000 2. For merchandise inventory, $280,000 3. For rent expense on a store building, $12,000 c. Later in the year, ARRC purchased merchandise inventory on account for $238,000. Before year-end, ARRC paid $148,000 of this account payable. d. During 2016, ARRC sold 2,200 units of merchandise inventory for $375 each. Before year-end, the company collected 95% of this amount. Cost of goods sold for the year was $340,000, and ending merchandise inventory totaled $178,000. e. The store employs three people. The combined annual payroll is $94,000, of which ARRC still owes $4,000 at year-end. f. At the end of the year, ARRC paid income tax of $21,000. There are no income taxes payable. g. Late in 2016, ARRC paid cash dividends of $40,000. h. For store fixtures, ARRC 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? 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. 3. Prepare ARRC's balance sheet at December 31, 2016. 4. Prepare ARRC's statement of cash flows using the indirect method for the year ended December 31, 2016. American Reserve Rare Coins (ARRC) was formed on January 1, 2016. Additional data for th (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 report the financial position of the company. to report the results of operations for the period. to show how net income was calculated. to show where cash came from and how cash was spent during the period. to show where the change in Retained Earnings came from