erican Rare Coins (ARC) was formed on January 1, 2018. Additional data for the year follow: (Click the icon to view the data.) Read the requirements Requirement 1. What is the purpose of the statement of cash flows? The purpose of the statement of cash flows is to show where cash came from and how cash was spent during the period. Requirement 2. Prepare ARC's income statement for the year ended December 31, 2018. Use the single-step format, with all revenues listed together and all expenses listed together. American Rare Coins Income Statement More info Year Ended December 31, 2018 Revenue Sales Revenue 660,000 a. On January 1, 2018, ARC issued no par common stock for $450,000. Expenses: b. Early in January, ARC made the following cash payments: $ 250,000 1. Cost of Goods Sold For store fixtures, $53,000 2. For merchandise inventory, $340,000 Rent Expense 20,000 3. For rent expense on a store building. $20,000 Salaries and Wages Expense 96,000 c. Later in the year, ARC purchased merchandise inventory on account for $239.000. Before year-end, ARC paid $139,000 of this accounts payable. Depreciation Expense 10,600 Income Tax Expense 17,000 d. During 2018, ARC sold 2,400 units of merchandise inventory for $275 each. Before year-end, the company collected 85% of this amount. Cost of goods sold for the year was $250,000, and ending merchandise inventory totaled $329,000. Total Expenses 393.600 266,400 e. The store employs three people. The combined annual payroll is $96,000, of which ARC still owes $3.000 at year-end Net Income Requirement 3. Prepare ARC's balance sheet at December 31, 2018. f. At the end of the year, ARC paid income tax of $17,000. There are no income taxes payable. g. Late in 2018, ARC paid cash dividends of $44.000. American Rare Coins h. For store fixtures, ARC uses the straight-line depreciation method, over five years, with zero residual value. Balance Sheet December 31, 2018 Assets Current Assets: Print Done Cash Accounts Receivable Merchandise Inventory Total Current Assets Property, Plant, and Equipment: Store Fixtures Less: Accumulated Depreciation Total Assets - $ Liabilities Current Liabilities: Accounts Payable Salaries Payable Total Current Liabilities Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity Stockholders' Equity Requirements What is the purpose of the statement of cash flows? 1. 2. Prepare ARC's income statement for the year ended December 31, 2018. Use the single-step format, with all revenues listed together and all expenses listed together. 3. Prepare ARC's balance sheet at December 31, 2018. 4. Prepare ARC's statement of cash flows using the indirect method for the year ended December 31, 2018. Print Done