The Extra Surplus Company's Balance Sheet for December 31, 2017 and the Income Statement for 2018 are shown below.Extra Surplus Company Balance Sheet December 31, 2017 Assets Cash$10,000 Accounts Receivable 5,000 Inventory 12,000 Property and Equipment, Net 20,000 $47,000 Liabilities and Stockholders' Equity Accounts Payable$10,000 Notes Payable, Long-Term 5,000 Common Stock 20,000 Retained Earnings 12,000 $47,000 Extra Surplus CompanyIncome StatementFor the Year Ended December 31, 2018Sales$13,000 Cost of Goods Sold 3,000 Salaries and Wage Expense 3,000 Interest Expense 1,000 Other Expenses 500 Net Income$5,500 Additional data:• Sales were $13,000; $8,000 in cash was received from

Question

customers.• Bought new land for cash, $10,000.• Sold other land for its book value of $5,000.• Paid $1,000 principal on the long-term note payable and $1,000 in interest.• Issued new shares of stock for $10,000 cash.• Cash dividends of $1,000 were declared and paid to stockholders.• Paid $5,500 on accounts payable.• No inventory purchases were made; other expenses were incurred on account.• All wages were paid in cash.• Other expenses were on account.Required:Part a. Prepare a balance sheet at December 31, 2018.Part b. Prepare the statement of cash flows using the direct method.

What will be an ideal response?

Answer 1