The comparative balance sheets and an income statement for Raceway Corporation follow. Balance Sheets As of December 31 Year 2 Year 1 Assets $ 76,994 $ 41,370 27,846 158,938 2,350 259,160 (148,410) (236,180) 189,990 Cash Accounts receivable 20,420 Merchandise inventory Prepaid rent Equipment Accumulated depreciation Land 174,830 4,700 289,850 76,790 Total assets $ 565,968 $ 371,780 Liabilities $ 65,651 24,978 Accounts payable (invento Salaries payable Stockholders' equity Common stock, $se par value Retained earnings 74,470 21,410 254,500 220,839 $ 565,968 $ 371,780 200,500 75,400 Total liabilities and equity Income Statement For the Year Ended December 31, Year 2 $1,500,000 (797, 201) 702,799 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense Rent expense Salaries expense Other operating expenses (24,120) (24, 140) (250, 030) (259,070) $ 145,439 Net income Other Information 1. Purchased land for $113,200. 2. Purchased new equipment for $100,800. 3. Sold old equipment that cost $131,490 with accumulated depreciation of $1,890 for $19,600 cash. 4. Issued common stock for $54,000. Requlred Prepare the statement of cash flows for Year 2 using the indirect method. (Amounts to be deducted should be Indicated with a minus sign.) RACEWAY CORPORATION Statement of Cash Flows For the Year Ended December 31, Year 2 Cash flows from operating activities: Plus: Increases in current assets and Decreases in current liabilities: Less: Increases in Current Assets and Decreases in current liabilities: Plus: Noncash charges Cash flows from investing activities: Cash flows from financing activities: Ending cash balance