Problem 13.7A (Static) Prepare and Analyze a Statement of Cash Flows with a Worksheet (LO13-1, LO13- 2, LO13-3, LO13-4, LO13-5, LO13-6, LO13-7, LO13-8) Satellite World was founded in 2020 to apply a new technology for efficiently transmitting closed-circuit (cable) television signals without the need for an In-ground cable. The company earned a profit of $115,000 in 2020, its first year of operations, even though it was serving only a small test market. In 2021, the company began dramatically expanding its customer base. Management expects both sales and net income to more than triple In each of the next five years. Comparative balance sheets at the end of 2020 and 2021, the company's first two years of operations, follow. (Notice that the balances at the end of the current year appear in the right-hand column.) Additional Information The following information regarding the company's operations in 2021 is available in either the company's Income statement or its accounting records. 1. Net Income for the year was $440,000. The company has never paid a dividend. 2. Depreciation for the year amounted to $147,000. 3. During the year the company purchased plant assets costing $2,200,000, for which it paid $1,850,000 in cash and financed $350,000 by Issuing a long-term note payable. (Much of the cash used in these purchases was provided by short-term borrowing. described as follows.) 4. In 2021, Satellite World borrowed $1,450,000 against a $5.5 million line of credit with a local bank. In its balance sheet, the resulting obligations are reported as notes payable (short-term). 5. Additional shares of capital stock (no par value) were issued to Investors for $500,000 cash. Assets Cash and cash equivalents Accounts receivable SATELLITE WORLD COMPARATIVE BALANCE SHEETS December 31, 2020 2021 $ 80,000 $ 37,000 Plant and equipment (net of accumulated depreciation) Totals Liabilities & Stockholders' Equity Notes payable (short-term) Accounts payable Accrued expenses payable. Notes payable (long-term) Capital stock (no par value) Retained earnings Totals 100,000 600,000 $780,000 850,000 2,653,000 $3,540,000 $1,450,000 30,000 63,000 45,000 32,000 390,000 740,000 200,000 700,000 115,000 555,000 $780,000 $3,540,000 Required: a. Prepare a worksheet for a statement of cash flows. b. Prepare a statement of cash flows for 2021 by the Indirect method. Complete this question by entering your answers in the tabs below. Required A Required B Prepare a worksheet for a statement of cash flows. (Enter all values as positive value.) SATELLITE WORLD Worksheet for a Statement of Cash Flows For the Year Ended December 31, 2021 Balance sheet effects: Assets Cash and cash equivalents Accounts receivable Effects of Transactions Beginning Balance Debit Changes Credit Changes Ending Balance