Statement of Cash Flows Chia Pet Caf had the following balance sheet and income statement for the years Year 2 and Year 3. During Year 3, Chia Pet sold a piece of equipment that originally cost $15,000 and had accumulated depreciation of $4,000 for $8,000. Required: Prepare a Statement of Cash Flows for Chia Pet Caf for Year 3. Chia Pet Caf Income Statement for the years ended December 31 Year 2 Year 3 Sales Food $546,000 $579,000 Beverage 178,000 187,000 Total Sales $724,000 $766,000 Cost of Sales Food $234,000 $245,000 Beverage 45,000 43,500 Total Cost of Sales $279.000 $288,500 Gross Profit $445,000 $477,500 Labour Expenses Payroll $214,000 $244,000 Benefits 27,820 24,400 Total Labour Costs $241,820 $268,400 Operating Expenses Credit card expenses $17,000 $19,000 Supplies 18,000 17,500 Property tax 5,000 6,000 Audit and legal 3,000 3,000 Advertising 4,500 5,000 Utilities and insurance 27,000 31,000 Repairs and maintenance 10,000 10,000 Interest 25,000 33,000 Total Expenses Before Depreciation $109,500 $124,500 Depreciation: building $20,000 $20,000 Depreciation: fixtures 23,000 24,000 Total Operating Expenses $152,500 $168,500 Net Income Before Taxes $50,680 $40,600 Income tax (25%) 2,670 10,150 Net income $38,010 $30,450 Balance Sheet as at December 31 Year 2 Year 3 Assets Cash $25,000 $22,000 Accounts receivable 34,000 Inventory 4,500 4,000 Total Current Assets $63,500 45,950 $71,950 Fixed Assets Building, equipment $478,000 $481,000 Less accumulated depreciation 155,000 195,000 Net fixed assets $323,000 $286,000 Total Assets $386,500 $357,950 Liabilities and Owners' Equity Accounts Payable $13,000 $19,000 Current portion of long-term debt 23,000 Total Current Liabilities $36,000 $45,000 |_ 26,000 Long-term debt Total Liabilities $214,000 $250,000 $195,000 $240,000 Owners' Equity Common Stock $75,000 $40,000 Retained Earnings 61,500 77,950 Total Owner's Equity $136,500 $117,950 Total Liabilities and Owners' Equity $386,500 $357,950