Question 27 (15 points) Hartman, Inc. has prepared the following comparative balance sheets for 2012 and 2013: Cash Accounts receivable Inventory Prepaid insuralice Plant assets Accumulated depreciation Patent 2013 $ 287,000 149,000 150,000 18,000 1,280,000 (450,000) 153,000 $1.587.000 2012 S. 153.000 117,000 180,000 27,000 1,050,000 (375,000) 174.000 $1.326,000 Increase/ Decrease 134,000 32,000 (30,000) (9,000) 230,000 (75,000) (21,000) $.153,000 60,000 $ 168,000 42.000 450,000 Accounts payable Other current liabilities Mortgage payable Preferred stock Additional paid-in capital preferred Common stock Retained earnings (15,000) 18.000 (450,000) 525,000 120,000 525,000 120,000 600,000 129.000 $1.587.000 600,000 66,000 $1.326.000 63.000 1. The change in plant assets is only related to the purchase of plant assets with cash in 2013. 2. Hartman issued preferred stock in 2013 to supplement its cash. 3. Hartman paid off its mortgage payable in 2013. 4. The change in accumulated depreciation is only related to depreciation expense in 2013. 5. Hartman paid dividends payment of $158,000 for the year. 6. All sales during the year were made on account. 7. All inventories were purchased on account, comprising the total accounts payable account. 8. Operating expenses shown below on the income statement include depreciation expense, patent amortization expense, insurance expense related to prepaid insurance, and other operating expenses. Other operating expenses were accrued to other current liabilities. $1,980,000 1,089,000 891,000 The income statement for 2013 is as follows: Sales Cost of Goods Sold Gross profit Operating expenses Depreciation expense Amortization expense Insurance expense Other operating expenses ? 21,000 54,000 ? 670,000 $ 221,000 Net income I Part A - Prepare a statement of cash flows (indirect method) for Hartman, Inc. for the year ended December 31, 2013. Part B - Prepare the operating section of the cash flow statement using the direct method