Official Reserve Rare Coins (ORRC) was formed on January 1, 2016. Additional data for the year follow: a. On January 1, 2016, ORRC issued no par common stock for $500,000. b. Early in January, ORRC made the following cash payments: 1. For store fixtures, $54,000 2. For merchandise inventory, $270,000 3. For rent expense on a store building, $11,000 c. Later in the year, ORRC purchased merchandise inventory on account for $244,000. Before year-end, ORRC paid $144,000 of this accounts payable. d. During 2016, ORRC sold 2,300 units of merchandise inventory for $225 each. Before year-end, the company collected 90% of this amount. Cost of goods sold for the year was $320,000, and ending merchandise inventory totaled $194,000. e. The store employs three people. The combined annual payroll is $88,000, of which ORRC still owes $6,000 at year-end. f. At the end of the year, ORRC paid income tax of $20,000. There are no income taxes payable. g. Late in 2016, ORRC paid cash dividends of $35,000. h. For store fixtures, ORRC uses the straight-line depreciation method, over five years, with zero residual value. Requirements 1. What is the purpose of the statement of cash flows? 2. Prepare ORRC’s income statement for the year ended December 31, 2016. Use the single-step format, with all revenues listed together and all expenses listed together. 3. Prepare ORRC’s balance sheet at December 31, 2016. 4. Prepare ORRC’s statement of cash flows using the indirect method for the year ended December 31, 2016. Answer to relevant Questions Accountants for Smithson, Inc. have assembled the following data for the year ended December 31, 2016: Prepare Smithson’s statement of cash flows using the indirect method. Include an accompanying schedule of non-cash ...The 2016 comparative balance sheet and income statement of Allentown Group, Inc. follow. Allentown disposed of a plant asset at book value during 2016. Prepare the spreadsheet for the 2016 statement of cash flows. Format ...Use the McDonald data from Problem P14-41B. P14-41B Requirements 1. Prepare the 2016 statement of cash flows by the direct method. 2. How will what you learned in this problem help you evaluate an investment? Vintage Mills’s income statement appears as follows (amounts in thousands): Use the following ratio data to complete Vintage Mills’s income statement: 1. Inventory turnover is 4.70 (beginning Merchandise Inventory was ...McDonald Corp. reported the following on its comparative income statement: Prepare a horizontal analysis of revenues and gross profit— both in dollar amounts and in percentages— for 2017 and 2016.