The comparative balance sheets and an income statement for Raceway Corporation follow. Balance Sheets As of December 31 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 $ 62,879 33,696 156,211 2,355 252,570 (146,700) 191,500 $ 552,511 $ 38,480 24,710 171,830 4,710 286,060 (234,220) 79,300 $ 370,870 $ 69,698 25,608 79,060 21,950 247,500 209,705 $ 552,511 198,500 71,360 $ 370,870 Income Statement For the Year Ended December 31, Year 2 Sales $1,496,000 Cost of goods sold (795,075) Gross profit 700,925 Operating expenses Depreciation expense (24,270) Rent expense (23,640) Salaries expense (259,630) Other operating expenses (255,040) Net income $ 138,345 Other Information 1. Purchased land for $112,200. 2. Purchased new equipment for $98,600. 3. Sold old equipment that cost $132,090 with accumulated depreciation of $111,790 for $20,300 cash. 4. Issued common stock for $49,000. Required 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