Exercise 20-8 Relationship between balance sheet and statement of cash flows (LO 20-4, LO 20-5) Selected financial statements for Ralston Company, a sole proprietorship, are as follows: Balance Sheet as of December 31, 20xo Assets: Cash Equipment Accumulated depreciation equipment Leased property Total assets Liabilities and owner's equity: Lease liability Ralston, capital Total liabilities and owner's equity $ 30,000 36,00 (11,250) 18, eee $ 72,750 $ 18,00 54,750 $ 72,750 Statement of Cash Flows for the Year Ended December 31, 20X1 $ 37,500 (8,250) (6,750) $ 22,500 Cash flows from operating activities Collections from customers Payments for salaries Payments for other expenses Net cash provided by operating activities Cash flows from investing activities Sale of equipment Purchase of land Purchase of investments Net cash used by investing activities Cash flows from financing activities Payment on lease liability Issue of long-term notes Owner withdrawals Net cash from financing activities Net decrease in cash 6,250 (13,400) (22,600) (29,750) (2,800) 15,800 (12,890) 200 $ (7,85e) Additional Information: a. During 20x1, equipment having accumulated depreciation of $4,500 was sold for a $4,000 gain. b. A $3.550 lease payment was made in 20X1, reducing the lease liability by $2,800. c. 20X1 depreciation expense: on leased property. $3,100; on equipment. $8.250. d. Net income for 20X1 was $15,150. Required: Using the provided data, prepare Ralston's December 31, 20x1, balance sheet. (Amounts to be deducted should be Indicated by a minus sign.) RAL STON COMPANY Balance Sheet December 31 20X1 20x0 Assets Cash Equipment Accumulated depreciation - equipment Leased property Accumulated depreciation - leased property Investments Land Total assets S 0 S 0 Liabilities and Capital Lease obligation Ralston, capital Note payable Total liabilities and capital S 0 S 0