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On January 1,2021 , Sweet issued its common stock for $510,000. Early in January, Sweet made the following cash payments: a. $220,000 for equipment b.
On January 1,2021 , Sweet issued its common stock for $510,000. Early in January, Sweet made the following cash payments: a. $220,000 for equipment b. $243,000 for inventory (nine cars at $27,000 each) c. $25,000 for 2021 rent on a store building In February, Sweet purchased three cars for inventory on account. The cost of this inventory was $117,000 ( $39,000 per car). Before year-end, the company paid off $93,600 of this debt. The company uses the first-in, first-out (FIFO) method to account for its inventory. During 2021, Sweet sold eleven autos for a total of $649,000. Before year-end, it had collected 40% of this amount. The business employs two people. The combined annual payroll is $151,000, of which Sweet owes $6,000 at year-end. At the end of the year, the company paid income taxes of $22,000. b. $243,000 for inventory (nine cars at $27,000 each) c. $25,000 for 2021 rent on a store building In February, Sweet purchased three cars for inventory on account. The cost of this inventory was $117,000 ( $39,000 per car). Before year-end, the company paid off $93,600 of this debt. The company uses the first-in, first-out (FIFO) method to account for its inventory. During 2021, Sweet sold eleven autos for a total of $649,000. Before year-end, it had collected 40% of this amount. The business employs two people. The combined annual payroll is $151,000, of which Sweet owes $6,000 at year-end. At the end of the year, the company paid income taxes of $22,000. Late in 2021, Sweet declared and paid cash dividends of $19,000. For equipment, Sweet uses the straight-line depreciation method, over five years, with zero residual value. 1. Prepare Sweet's income statement for the year ended December 31,2021. Use the single-step format, with all revenues listed together and all expenses together. 2. Prepare Sweet's balance sheet at December 31, 2021. 3. Prepare Sweet's statement of cash flows for the year ended December 31, 2021. Format cash flows from operating activities using the indirect method
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