Classic Reserve

Rare Coins

(CRRC)

was formed on

January

1,

2018.

Additional data for the year follow:

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(Click the icon to view the data.)Read the requirements

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.

Requirement 1. What is the purpose of the statement of cash flows?

The purpose of the statement of cash flows is

a. On January 1, 2018, CRRC issued no par common stock for $500,000. b. Early in January, CRRC made the following cash payments: 1. For store fixtures, $52,000 2. For merchandise inventory, $270,000 3. For rent expense on a store building, $21,000 c. Later in the year, CRRC purchased merchandise inventory on account for $241,000. Before year-end, CRRC paid $141,000 of this accounts payable. d. During 2018, CRRC sold 2,700 units of merchandise inventory for $425 each. Before year-end, the company collected 80% of this amount. Cost of goods sold for the year was $350,000, and ending merchandise inventory totaled $161,000. e. The store employs three people. The combined annual payroll is $82,000, of which CRRC still owes $6,000 at year-end. f. At the end of the year, CRRC paid income tax of $22,000. There are no income taxes payable. g. Late in 2018, CRRC paid cash dividends of $40,000. h. For store fixtures, CRRC uses the straight-line depreciation method, over five years, with zero residual value. Classic Reserve Rare Coins (CRRC) was formed on January 1, 2018. Additional data for the year follow: Click the icon to view the data.) Read the requirements. ... 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 CRRC's income statement for the year ended December 31, 2018. Use the single-step format, with all revenues listed together and all expenses listed together. Classic Reserve Rare Coins Income Statement Year Ended December 31, 2018 Revenue: Expenses: Total Expenses Net Income