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Following is a partially completed balance sheet for Hoeman Inc. at December 31, 2020, together with comparative data for the year ended December 31, 2019.

Following is a partially completed balance sheet for Hoeman Inc. at December 31, 2020, together with comparative data for the year ended December 31, 2019. From the statement of cash flows for the year ended December 31, 2020, you determine the following:

  • Net income for the year ended December 31, 2020, was $98,500.
  • Dividends paid during the year ended December 31, 2020, were $65,000.
  • Accounts receivable decreased $12,000 during the year ended December 31, 2020.
  • The cost of new buildings acquired during 2020 was $130,000.
  • No buildings were disposed of during 2020.
  • The land account was not affected by any transactions during the year, but the fair value of the land at December 31, 2020, was $184,000.

Required:

  1. Complete the December 31, 2020, balance sheet. (Hint: Long-term debt is the last number to compute to make the balance sheet balance.)
  2. Prepare a statement of cash flows for the year ended December 31, 2020, using the indirect method.

image text in transcribedimage text in transcribed

Comparative Balance Sheets At December 31, 2020 and 2019 2020 2019 Assets: Current assets: Cash Accounts receivable Inventory Total current assets Land 55,000 $ 47,500 122,500 134,500 171,500 184,500 $ 349,000 $ 366,500 144,000 144,000 414,000 284,000 (125,000) (108,500) $ 433,000 $ 319,500 $ 782,000 $ 686,000 Buildings Less: Accumulated depreciation Total land & buildings Total assets Liabilities: Current liabilities: 194,500 Accounts payable Note payable $ 164,000 $ 163,000 $ 327,000 $ $ 163,000 125,500 320,000 Total current liabilities 134,000 $ Long-term debt Stockholders' Equity: Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 51,000 $ 49,000 216,500 183,000 267,500 $ 232,000 $ 686,000 Statement of Cash Flows For the Year Ended December 31, 2020 $ 98,500 Cash flows from operating activities: Net income Add (deduct) items not affecting cash: Depreciation expense Decrease in accounts payable Decrease in inventory 16,500 (30,500) 13,000 12,000 37,500 Decrease in accounts receivable Increase in note payable $ 147,000 Net cash provided by operating activities Cash flows from investing activities: Cash paid to acquire new buildings $ (130,000) $ (130,000) Cash flows from financing activities: Payment of cash dividends on common stock Cash received from issuance of common stock Cash received from issuance of long-term debt 2,000 $ 2,000 $ 19,000 Cash balance, January 1, 2020 Cash balance, December 31, 2020 $ 19,000

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