Brown Company's current-year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, and (4) all debits to Accounts Payable reflect cash payments for inventory. Brown COMPANY Income Statement For Current Year Ended December 31 Prior Year $ 582,500 285,000 297,500 $ Brown COMPANY Comparative Balance Sheets At December 31 Current Year Assets Cash $ 49,800 Accounts Receivable 65,810 Inventory 275,656 Prepaid expenses 1,250 Total Current assets 392,516 Equipment .. 157,500 Accum. Depreciation-Equipment (36,625) Total Assets $ 513,391 $ 132,400 20,750 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses). Loss on sale of equipment. Income before taxes . Income taxes expense Net income 153,150 73,500 50,625 251,800 1,875 377,800 108,000 (46,000) 439,800 (5,125) 139,225 24,250 114,975 $ $ $ $ Liabilities and Equity Accounts payable .. Long-term notes payable Total liabilities 53,141 75,000 128,141 114,675 54,750 169,425 Additional Information on Current-Year Transactions a. The loss on the cash sale of equipment was $5,125 (details in b). b. Sold equipment costing $46,875, with accumulated depreciation of $30,125, for $11,625 cash. c. Purchased equipment costing $96,375 by paying $30,000 cash and signing a long-term notes payable for the balance. d. Paid $46,125 cash to reduce the long-term notes payable. e. Issued 2,500 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $50,100. Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings . Total liabilities and equity 162,750 37,500 185,000 513,391 150,250 0 120,125 439,800 $ $ Instructions: Complete the questions below. Show your work to each question in the corresponding tabs in this Excel workbook. State your name in the highlighted cell on each sheet with your solution. Save this Excel workbook using the following naming convention: Excel Projectl-Cash Flows_LastName_FirstInitial The form and presentation of your work contribute towards your grade Submit the completed workbook via Canvas by 11:59 pm on 7/31/21. . Required: 1 Prepare a cash flow worksheet to aid in the preparation of the statement of cash flows using the indirect method. (25 pts.) Refer to the information reported about Brown Company above and the following list of transactions and events. Identify the debits and credits in the Analysis of Changes columns with letters that correspond to the following list of transactions and events. a. Net income was $114,975. g. Sold equipment costing $46,875, with accumulated depreciation of $30,125, for $11,625 cash. This yielded a loss of $5,125. b. Accounts receivable increased. h. Purchased equipment costing $96,375 by paying $30,000 cash and c. Inventory increased. (i) by signing a long-term notes payable for the balance. d. Prepaid expenses decreased. j. Paid $46,125 cash to reduce the long-term notes payable. e. Accounts payable decreased. k. Issued 2,500 shares of common stock for $20 cash per share. f. Depreciation expense was $20,750. 1. Declared and paid cash dividends of $50,100. 2a. Prepare a complete statement of cash flows using the indirect method for the current year. Disclose any noncash investing and financing activities in a note. (15 pts.) 2b. Analyze and discuss the statement of cash flows prepared in part 2a, giving special attention to the wisdom of the cash dividend payment. (5 pts.) 3 Prepare a complete statement of cash flows using the direct method. Disclose any noncash investing and financing activities in a note. (15 pts.) 1