Required: Part 2 Solutions Spreadsheet, prepare a direct method Cash Flow Statement based on the information above. Include a Supplemental Schedule Reconciling Net Income to Net Cash Flows from Operating Activities.

Problems #2 & #3: The accounting records of Hawkeye Industries, Inc. were damaged by an avalanche of buckeyes. Management has been able to recover the following adjusted (but out-of-order) trial balance as of December 31, 2020:

Required: On Part 2 Solutions Spreadsheet, prepare a classified balance sheet and multiple-step income statement (with earnings per share disclosure) for Hawkeye Industries, Inc. for the year ended December 31, 2020.

Problems (30%) Problem #1: Information for Exam Company is listed below: Exam Company 1/1/2020 12/31/2020 ASSETS Current Assets Cash 74,000 $ 62,200 Accounts Receivable 289,000 322,500 Interest Receivable 1,200 750 Inventory 584,800 653,000 Prepaid Rent 39,500 34,440 Total Current Assets 988,500 1,072,890 1/1/2020 12/31/2020 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts Payable $ 179,200 $ 157,000 Aced. Sell & Admn. Costs 236,400 298,860 Unearned Revenue 49,600 39,480 Interest Payable 2,400 2.000 Total Current Liabilities 467,600 497,340 Notes Payable 575,000 485,000 Total Liabilities 1,042,600 982,340 Noncurrent Assets Land Buildings & Equipment Build & Equip-Accum. Depn. Total Noncurrent Assets TOTAL ASSETS 375,000 2,125,000 (726,500) 1,773,500 S 2,762,000 352,000 2,164,000 (872,500) 1,643,500 $ 2,716,390 Common Stock 1,250,000 Retained Earnings 469,400 Total Equity 1,719,400 TOTAL LIAB. & EQUITY $ 2,762,000 1,300,000 434,050 1,734,050 $ 2,716,390 $ 9,380,000 (7,504,000) 1,876,000 Other Information Gain on sale of Land $14,000. Original cost $68,000. Loss on sale of Equipment $9,200, Original cost of Equipment sold $36,000. Accumulated Depreciation on Equipment sold $22,000 No borrowings on Notes Payable. Sales Cost of Goods Sold Gross Margin Operating Expenses Selling & Administrative Expenses Depreciation Rent Expense Operating Income Non-Operating Items Interest Revenue Interest Expense Loss on Equipment Sale Gain on Land Sale Net Income (1,626,000) (168,000) (78,000) 4,000 1,850 (33,500) (9.200) 14,000 $ (22,850) Required: On the Exam #2 Part 2 Solutions Spreadsheet, prepare a direct method Cash Flow Statement based on the information above. Include a Supplemental Schedule Reconciling Net Income to Net Cash Flows from Operating Activities. Problems #2 & #3: The accounting records of Hawkeye Industries, Inc. were damaged by an avalanche of buckeyes. Management has been able to recover the following adjusted (but out-of-order) trial balance as of December 31, 2020: Adjusted Trial Balance -- December 31, 2020 Account Titles Debit Credit Accounts Payable 379,400 Accounts Receivable 298,400 Accrued Liabilities (Current) 222,000 Allowance for Bad Debts 37,760 Assets Held for Sale 245,000 Bonds Payable, Due 2030 2,500,000 Buildings 3,750,000 Buildings Accumulated Depreciation 1,750,000 Cash ($35,000 restricted for Bond Sinking Fund) 162,000 Common Stock: $5 par, 200,000 shares authorized, issued and outstanding 1,000,000 Copyright 57,000 Cost of Goods Sold 12,290,000 Deposits on Inventory Purchases 12,800 Dividends 40,000 Gain on Machinery Sale 5,500 Gain on Disposal of Discontinued Operations 17,000 General & Administrative Expenses 2,976,500 Interest Expense 155,000 Interest Revenue 7,400 Land ($25,000 held for speculation) 518,000 Liabilities Held for Sale 177,500 Loss on Equipment Sale 32,000 Machinery & Equipment-Accumulated Depreciation 840,000 Machinery & Equipment 2,789,000 Marketable Securities ($20,000 of total is money market funds; of remaining securities 25% will be sold in 2021, balance to be held for five years) 210,000 Merchandise Inventory 542,000 Notes Payable-due in 2021 110,000 Notes Payable-due in equal installments over next eight years 500,000 Operating Loss from Discontinued Operations 82,000 Research & Development Costs 311,500 Restructuring Costs 38,500 Retained Earnings 622,540 Sales Revenue 17,789,000 Selling Expenses 1,420,000 Tax Expense (Total) 97,000 Taxes Payable 97,000 Write-off of Obsolete Inventory 28,400 Totals 26,055,100 26,055,100 Other Information Company stock was outstanding for the entire year. Tax Expense is the total income tax from all sources. The effective tax rate is 20%. Assets and liabilities held for sale are discontinued operations items that were not fully disposed of at year end. Required: On the Exam #2 Part 2 Solutions Spreadsheet, prepare a classified balance sheet and multiple-step income statement (with earnings per share disclosure) for Hawkeye Industries, Inc. for the year ended December 31, 2020. Problems (30%) Problem #1: Information for Exam Company is listed below: Exam Company 1/1/2020 12/31/2020 ASSETS Current Assets Cash 74,000 $ 62,200 Accounts Receivable 289,000 322,500 Interest Receivable 1,200 750 Inventory 584,800 653,000 Prepaid Rent 39,500 34,440 Total Current Assets 988,500 1,072,890 1/1/2020 12/31/2020 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts Payable $ 179,200 $ 157,000 Aced. Sell & Admn. Costs 236,400 298,860 Unearned Revenue 49,600 39,480 Interest Payable 2,400 2.000 Total Current Liabilities 467,600 497,340 Notes Payable 575,000 485,000 Total Liabilities 1,042,600 982,340 Noncurrent Assets Land Buildings & Equipment Build & Equip-Accum. Depn. Total Noncurrent Assets TOTAL ASSETS 375,000 2,125,000 (726,500) 1,773,500 S 2,762,000 352,000 2,164,000 (872,500) 1,643,500 $ 2,716,390 Common Stock 1,250,000 Retained Earnings 469,400 Total Equity 1,719,400 TOTAL LIAB. & EQUITY $ 2,762,000 1,300,000 434,050 1,734,050 $ 2,716,390 $ 9,380,000 (7,504,000) 1,876,000 Other Information Gain on sale of Land $14,000. Original cost $68,000. Loss on sale of Equipment $9,200, Original cost of Equipment sold $36,000. Accumulated Depreciation on Equipment sold $22,000 No borrowings on Notes Payable. Sales Cost of Goods Sold Gross Margin Operating Expenses Selling & Administrative Expenses Depreciation Rent Expense Operating Income Non-Operating Items Interest Revenue Interest Expense Loss on Equipment Sale Gain on Land Sale Net Income (1,626,000) (168,000) (78,000) 4,000 1,850 (33,500) (9.200) 14,000 $ (22,850) Required: On the Exam #2 Part 2 Solutions Spreadsheet, prepare a direct method Cash Flow Statement based on the information above. Include a Supplemental Schedule Reconciling Net Income to Net Cash Flows from Operating Activities. Problems #2 & #3: The accounting records of Hawkeye Industries, Inc. were damaged by an avalanche of buckeyes. Management has been able to recover the following adjusted (but out-of-order) trial balance as of December 31, 2020: Adjusted Trial Balance -- December 31, 2020 Account Titles Debit Credit Accounts Payable 379,400 Accounts Receivable 298,400 Accrued Liabilities (Current) 222,000 Allowance for Bad Debts 37,760 Assets Held for Sale 245,000 Bonds Payable, Due 2030 2,500,000 Buildings 3,750,000 Buildings Accumulated Depreciation 1,750,000 Cash ($35,000 restricted for Bond Sinking Fund) 162,000 Common Stock: $5 par, 200,000 shares authorized, issued and outstanding 1,000,000 Copyright 57,000 Cost of Goods Sold 12,290,000 Deposits on Inventory Purchases 12,800 Dividends 40,000 Gain on Machinery Sale 5,500 Gain on Disposal of Discontinued Operations 17,000 General & Administrative Expenses 2,976,500 Interest Expense 155,000 Interest Revenue 7,400 Land ($25,000 held for speculation) 518,000 Liabilities Held for Sale 177,500 Loss on Equipment Sale 32,000 Machinery & Equipment-Accumulated Depreciation 840,000 Machinery & Equipment 2,789,000 Marketable Securities ($20,000 of total is money market funds; of remaining securities 25% will be sold in 2021, balance to be held for five years) 210,000 Merchandise Inventory 542,000 Notes Payable-due in 2021 110,000 Notes Payable-due in equal installments over next eight years 500,000 Operating Loss from Discontinued Operations 82,000 Research & Development Costs 311,500 Restructuring Costs 38,500 Retained Earnings 622,540 Sales Revenue 17,789,000 Selling Expenses 1,420,000 Tax Expense (Total) 97,000 Taxes Payable 97,000 Write-off of Obsolete Inventory 28,400 Totals 26,055,100 26,055,100 Other Information Company stock was outstanding for the entire year. Tax Expense is the total income tax from all sources. The effective tax rate is 20%. Assets and liabilities held for sale are discontinued operations items that were not fully disposed of at year end. Required: On the Exam #2 Part 2 Solutions Spreadsheet, prepare a classified balance sheet and multiple-step income statement (with earnings per share disclosure) for Hawkeye Industries, Inc. for the year ended December 31, 2020