Classic Motors, Inc., was formed on January 1, 2018. The following transactions occurred during 2018:

Choices:

On January 1, 2018, Classic issued its common stock for $440,000. Early in January, Classic made the following cash payments: a. $180,000 for equipment b. $203,000 for inventory (seven cars at $29,000 each) c. $17,000 for 2018 rent on a store building In February, Classic purchased two cars for inventory on account. The cost of this inventory was $80,000 ($40,000 per car). Before year-end, the company paid off $24,000 of this debt. The company uses the first-in, first-out (FIFO) method to account for its inventory During 2018, Classic sold eight autos for a total of $488,000. Before year-end, it had collected 50% of this amount. The business employs five people. The combined annual payroll is $125,000, of which Classic owes $10,000 at year-end. At the end of the year, the company paid income taxes of $12,600. Late in 2018, Classic declared and paid cash dividends of $10,000. For equipment, Classic uses the straight-line depreciation method, over five years, with zero residual value. Classic Motors, Inc. Statement of Cash Flows (Indirect Method) Year Ended December 31, 2018 Cash flows from operating activities: Adjustments to reconcile net income to net cash provided by (used for) operating activities: Net cash provided by (used for) operating activities Cash flows from investing activities: Net cash provided by (used for) investing activities Cash flows from financing activities: Net cash provided by (used for) financing activities Net increase (decrease) in cash Classic Motors, Inc. Statement of Cash Flows (Indirect Method) Year Ended December 31, 2018 Cash flows from operating activities: Depreciation Increase in accounts payable ncrease in accounts receivable Increase in inventory Increase in salary payable Issuance of common stock Net income Payment of dividend Purchase of equipment Net cash provided by (used for) investing activities Cash flows from financing activities: Net cash provided by (used for) financing activities Net increase (decrease) in cash