Other Information

Purchased land for $114,700.

Purchased new equipment for $95,900.

Sold old equipment that cost $130,280 with accumulated depreciation of $110,880 for $19,400 cash.

Issued common stock for $52,000.

RequiredPrepare the statement of cash flows for Year 2 using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

Year 2 Year 1 Assets Cash Accounts receivable Merchandise inventory Prepaid rent Equipment Accumulated depreciation Land Total assets Liabilities Accounts payable (inventory) Salaries payable Stockholders' equity Common stock, $50 par value Retained earnings Total liabilities and equity $ 72,891 33,586 159,065 2,280 253,620 (143,200) 195,150 $ 573,392 $ 40,720 24,630 174,970 4,560 288,000 (233,140) 80,450 $ 380, 190 $ 70, 147 33,728 79,570 28,910 251,500 218,017 $ 573,392 199,500 72,210 $ 380,190 Income Statement For the Year Ended December 31, Year 2 Sales $1,502,000 Cost of goods sold (798,263) Gross profit 703,737 Operating expenses Depreciation expense (20,940) Rent expense (20,530) Salaries expense (259,000) Other operating expenses (257,460) Net income $ 145,807 RACEWAY CORPORATION Statement of Cash Flows For the Year Ended December 31, Year 2 Cash flows from operating activities: Plus: Decreases in current assets and Increases in current liabilities: Less: Increases in Current Assets and Decreases in current liabilities: Plus: Noncash charges $ CA 0 Cash flows from investing activities: Plus: Noncash charges $ GA 0 Cash flows from investing activities: 0 Cash flows from financing activities: 0 Ending cash balance $ 0