Squirrel Tree Services reports the following amounts on December 31, 2021.Assets                                               Liabilities and Stockholders’ EquityCash $ 7,700                                           Accounts payable $ 9,700Supplies 1,800                                         Salaries payable 3,500Prepaid insurance 3,500                         Notes payable 20,000Building 72,000                                      Common stock 40,000                                                               Retained earnings 11,800In addition, the company reported the following cash flows.Cash Inflows                                                        Cash OutflowsCustomers $60,000                                     Employee salaries $22,000Borrow from the bank (note) 20,000           Supplies 4,000Sale of investments 10,000                         Dividends 6,500                                                                   Purchase building 62,000Required:1. Prepare a balance sheet.2. Prepare a statement of cash flows.

Question

Squirrel Tree Services reports the following amounts on December 31, 2021.
Assets                                               Liabilities and Stockholders’ Equity
Cash $ 7,700                                           Accounts payable $ 9,700
Supplies 1,800                                         Salaries payable 3,500
Prepaid insurance 3,500                         Notes payable 20,000
Building 72,000                                      Common stock 40,000
                                                               Retained earnings 11,800

In addition, the company reported the following cash flows.
Cash Inflows                                                        Cash Outflows
Customers $60,000                                     Employee salaries $22,000
Borrow from the bank (note) 20,000           Supplies 4,000
Sale of investments 10,000                         Dividends 6,500
                                                                   Purchase building 62,000

Required:
1. Prepare a balance sheet.
2. Prepare a statement of cash flows.

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