Stylistic Automobiles of Alberta Ltd. was formed on January 1, 2014, when Stylistic issued common shares for $440,000. Early in January 2014, Stylistic made the following cash payments:

a. $180,000 for equipment

b. $203,000 for inventory (seven cars at $29,000 each)

c. $17,000 for 2014 rent on a store building

In February 2014, Stylistic purchased two cars for inventory on account. Cost of this inventory was

$80,000($40,000 each). Before year-end, Stylistic paid $48,000 of this debt. Stylistic uses the FIFO method to account for inventory. During 2014, Stylistic sold eight stylistic autos for a total of $488,000. Before year-end, Stylistic collected 90% of this amount. The business employs five people. The combined annual payroll is $125,000, of which Stylisticowes $6,000 at year-end. At the end of the year, Stylistic paid income tax of $12,600.

Late in 2014, Stylistic declared and paid cash dividends of $16,000. For equipment, Stylistic uses thestraight-line depreciation method over five years with zero residual value.

Requirement 1. Prepare Stylistic Automobiles of Alberta Ltd.'s income statement for the year ended December 31, 2014.

Use the single-step format, with all revenues listed together and all expenses listed together. (Round your answers to the nearest whole number.)

		Stylistic Automobiles of Alberta, Ltd.
		Income Statement
		For the Year Ended December 31, 2014
	Revenue:
	Expenses:
	Net income

Requirement 2. Prepare Stylistic's balance sheet at December 31, 2014. (Round your answers to the nearest whole number.)

	Stylistic Automobiles of Alberta, Ltd.
	Balance Sheet
	December 31, 2014
	Assets				Liabilities
	Current assets:				Current liabilities:
					Shareholders' equity
	Property, plant, and equipment:
	Total assets				Total liabilities and shareholders' equity

Requirement 3. Prepare Stylistic's statement of cash flows for the year ended December 31, 2014.

Format cash flows from operating activities by using the indirect method. (Use parentheses or a minus sign for numbers to be subtracted and for a net decrease in cash. Enter "0" for zero balances. Round your answers to the nearest whole number.)

	Stylistic Automobiles of Alberta, Ltd.
	Statement of Cash Flows
	For the Year Ended December 31, 2014
	Cash flows from operating activities:
	Adjustments to reconcile net income to
	net cash provided by (used for) operating activities:
	Net cash provided by (used for) operating activities
	Cash flows from investing activities:
	Net cash provided by (used for) investing activities

	Cash flows from financing activities:
	Net cash provided by (used for) financing activities
	Net increase (decrease) in cash

Requirement 4. Comment on the business performance based on the statement of cash flows.

The statement of cash flows indicates that operations PROVIDED / USED cash. However, the accounts receivable and inventory WILL / WILL NOT contribute to cash in 2015.

Investment in equipment will PROVIDED / USE resources for future operations and $__________ of the original funds are still available after a dividend payment. The statement of cash flows indicates a BAD / GOOD first year of operations.