Problem # 1: Preparation of a Balance Sheet (20 points) Presented below are the balance sheet accounts for Aura, Inc. at 12/31/2020. Prepaid expenses 439,600 Notes payable (to banks) 1,325,000 Common stock, $1 par value 1,000,000 Land 2,400,000 Equipment 7,350,000 Rent payable (short-term) 225,000 Discount on bonds payable 75,000 Buildings 8,200,000 Bonds payable 1,500,000 Income taxes receivable 488,150 Accounts payable 2,450,000 Notes receivable 2,228,500 Accumulated depreciation-buildings 1,351,000 Income taxes payable 491,810 Retained earnings ? Accumulated depreciation-equipment 1,460,000 Debt investments (trading) 605,000 Notes payable (long-term) 8,000,000 Inventory 1,199,000 Payroll taxes payable 887,955 Cash 1,800,000 Goodwill 625,000 Preferred stock, $10 par value 750,000 Rent payable (long-term) 2,400,000 Additional information for 2020: - Common stock authorized was 4,000,000 shares, and preferred stock authorized was 200,000 shares. - Assume that notes receivable and notes payable are short-term, unless stated otherwise. - Cost and fair value of debt investments (trading) are the same. Instructions: a) Prepare a classified balance sheet in good form as of December 31, 2020. b) Show your calculations to determine Retained Earnings as of December 31, 2020. Note: Remember to calculate and present the outstanding common stock and preferred stock. Problem #2: Preparation of a Statement of Cash Flows (20 points) The following is a condensed version of the comparative balance sheets for Del Oeste, Inc. for 2019 and 2020 at December 31. 2020 2019 Cash 531,000 234,000 Accounts receivable 540,000 555,000 Investments 156,000 222,000 Equipment 894,000 720,000 Accumulated depreciation-equipment (318,000) (267,000) Current liabilities 402,000 453,000 Common stock 480,000 480,000 Retained earnings 921,000 531,000 Additional information for 2020: - Investments were sold at a loss of $30,000 - No equipment was sold during 2020 - Cash dividends paid were $90,000 -Net income was $480,000. Instructions: Prepare a statement of cash flows for 2020 for Del Oeste, Inc