The $2022$ comparative balance sheet and income statement of All Wired, Inc., follow:

ALL WIRED, INC.

Comparative Balance Sheet

December $31,2022$ and $2021$

Increase

$20222021($Decrease$)$

Current assets:

Cash and cash equivalents $$26,700$ $$15,600$ $$11,100$

Accounts receivable $$26,500$ $$25,300$ $$1,200$

Inventories $$79,900$ $$91,900$ $$(12,000)$

Plant assets:

Land $$35,500$ $$11,000$ $$24,500$

Equipment, net $$1,02,900$ $$90,700$ $$12,200$

Total assets $$2,71,500$ $$2,34,500$ $$37,000$

Current liabilities:

Accounts payable $$35,600$ $$30,500$ $$5,100$

Accrued liabilities $$28,900$ $$30,600$ $$(1,700)$

Long$-$term liabilities:

Notes payable $$77,000$ $$1,03,000$ $$(26,000)$

Stockholders$$ equity:

Common stock $$88,200$ $$64,300$ $$23,900$

Retained earnings $$41,800$ $$6,100$ $$35,700$

Total liabilities and stockholders$$ equity $$2,71,500$ $$2,34,500$ $$37,000$

ALL WIRED, INC.

Income Statement

Year Ended December $31,2022$

Revenues:

Sales revenue $$4,38,000$

Interest revenue $$8,500$

Total revenues $$4,46,500$

Expenses:

Cost of goods sold $$2,09,200$

Salary expense $$72,400$

Depreciation expense $$14,500$

Other operating expense $$10,000$

Interest expense $$21,500$

Income tax expense $$19,400$

Total expenses $$3,47,000$

Net income $$99,500$

Additionally, All Wired purchased land of $$24,500$ by financing it $100\%$ with long$-$ term notes payable during $2022.$ During the year, there were no sales of land or equipment, no additional issuances of notes payable, no retirements of stock, and no treasury stock transactions.

Requirements

$1.$ Prepare the $2022$ statement of cash flows, formatting operating activities by the indirect method.

$2.$ How will what you learned in this problem help you evaluate an investment?Purpose of the statement and preparing the statement of cash flows$-$indirect method

National Reserve Rare Coins $($NRRC$)$ was formed on January $1,2022.$ Additional data for the year follows:

a$.$ On January $1,2022,$ NRRC issued common stock for $$525,000.$

b$.$ Early in January, NRRC made the following cash payments:

For store fixtures, $$55,000.$

For inventory, $$320,000.$

For rent expense on a store building, $$17,000.$

c$.$ Later in the year, NRRC purchased inventory on account for $$244,000.$ Before year$-$end, NRRC paid $$164,000$ of this account payable.

d$.$ During $2022,$ NRRC sold $2,500$ units of inventory for $$400$ each. Before year end, the company collected $85\%$ of this amount. Cost of goods

sold for the year was $$320,000,$ and ending inventory totaled $$244,000.$

e$.$ The store employs three people. The combined annual payroll is $$80,000,$ of which NRRC still owes $$3,000$ at year$-$end.

f$.$ At the end of the year, NRRC paid income tax of $$20,000.$

g$.$ Late in $2022,$ NRRC paid cash dividends of $$39,000.$

h$.$ For equipment, NRRC uses the straight$-$line depreciation method, over five years, with zero residual value.

Requirements

What is the purpose of the cash flow statement?

Prepare NRRC$\text{'}$s income statement for the year ended December $31,2022.$ Use the single$-$step format, with all revenues listed together and all expenses listed together.

Prepare NRRC$\text{'}$s balance sheet at December $31,2022.$

Prepare NRRC$\text{'}$s statement of cash flows using the indirect method for the year ended December $31,2022.$