(L.OBJ. 1, 2, 3) Purpose of the statement and preparing the Statement of Cash Flows—indi...

(L.OBJ. 1, 2, 3) Purpose of the statement and preparing the Statement of Cash Flows—indirect method [40—50 min]

North American Reserve Rare Coins (NARRC) was formed on January 1, 2010, when NARRC issued its common stock for $475,000. Additional data for the year follows:

Requirements

1. What is the purpose of the cash flow statement?

2. Prepare NARRC’s Income Statement for the year ended December 3 1, 2010. Use the single-step format, with all revenues listed together and all expenses together.

3. Prepare NARRC’S Balance Sheet at December 31, 2010.

4. Prepare NARRCs Statement of Cash Flows using the indirect method for the year ended December 31, 2010.