Chapter 16, Problem P16.39BPGB

To determine

Income statement:

An income statement is concerned with the operations of a business expressed in income, expenses and profit or loss over the period of time.

Balance sheet:

A Balance sheet is a financial statement which is concerned with the financial activity occurred during a particular period expressed in assets and liabilities of the business.

Statement of Cash Flow:

Statement of Cash flow financial statement which shows the cash inflows and outflows of a company from operating activities, investing activities and financing activities during a particular period of time.

To determine:

1. The purpose of the statement of cash flows.

2. Prepare CRC’s income statement for the year ended December 31, 2018.

3. Prepare CRC’s balance sheet at December 31, 2018.

4. Prepare CRC’s statement of cash flows using indirect method for the year ended December 31, 2018