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Question 2. The Extra Surplus Company's Balance Sheet for December 31, 2020, and the Income Statement for 2021 are shown in the table on
Question 2. The Extra Surplus Company's Balance Sheet for December 31, 2020, and the Income Statement for 2021 are shown in the table on the following page. Additional data: Sales were $13,000; $8,000 in cash was received from customers. Bought new land for cash, $10,000. Sold other land for its book value of $5,000. Paid $1,000 principal on the long-term note payable and $1,000 in interest. Issued new shares of stock for $10,000 cash. Cash dividends of $1,000 were declared and paid to stockholders. Paid $5,500 on accounts payable. No inventory purchases were made; other expenses were incurred on account. All wages were paid in cash. Other expenses were on account. Required: a. Prepare a comparative balance sheet at December 31, for 2021 and 2020. Include the change from 2020 to 2021. b. Prepare the statement of cash flows using the direct method.
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