Required: Prepare an entire 2021 Statement of Cash Flows (all three sections) using the indirect method for the Operating Activities section. All of the numbers in your completed Statement of Cash Floys must be cell references to other numbers in this worksheet. EXTRA CREDIT: The following is optional. Prepare the Operating Activities using the direct method. [You must first prepare the Operating Activites using the indirect method as required above.) You may earn 10 points of extra credit if, in addition to preparing the Operating Activities using the indirect method, you also prepare the Operating Activities using the direct method. United Brands Corporation Balance Sheets December 31, 2021 and 2020 ($ in millions) 2021 2020 $41 32 ASSETS Current Assets Cash Accounts receivable Inventory Prepaid insurance Property, Plant, & Equipment: Land Equipment Less: Accumulated depreciation Total Assets $20 30 50 6 W 60 75 (20) $221 (16) $267 $26 3 6 34 $20 1 8 47 LIABILITIES Current Liabilities: Accounts payable Salaries payable Income tax payable Notes payable, current Long-term Liabilities: Notes payable, long-term EQUITY Common stock, $10 par, 50 million shares authorized, 13 million issued in 2021, 10 million issued in 2020 Paid-in capital in excess of par-common stc Retained Earnings Total Liabilities and Equity 20 0 $130 $100 29 19 $267 20 25 $221 United Brands Corporation Income Statement for the year ended December 31, 2021 ($ in millions) $100 (60) (13) Sales revenue Cost of goods sold Gross profit Operating expenses: Salaries expense Depreciation expense Insurance expense Income from operations Other income and expenses: Interest expense Gain on sale of land Loss on sale of equipment Income before taxes Income tax expense Net income 288 289 290 291 Additional information for 2021 transactions: a. All inventory is purchased on account, and the Accounts Payable account is used exclusively for inventory purchases. b. In 2021, a portion of the company land was sold for $18 million in cash. This land was originally purchased in a previous year for $10 million. o. Land was purchased in 2021 for $30 million cash for use as a parking lot. d. Equipment was sold in 2021 that had an Accumulated Depreciation balance of $7 million on the date of sale. The equipment originally cost $14 million and was sold at a loss for cash. (HINT: You must determine the amount of cash received. Reconstruct the journal entry.) e. In 2021, new equipment was acquired by issuing a 127, five-year, $20 million note payable to the seller. 1. During 2021, $55 million of short-term (current) notes payable were paid in cash and $42 million of cash was borrowed in the form of short-term debt (current notes payable). g. The increase in the common stock account is attributed to two transactions: 1. Issuance of a 10% stock dividend (1 million shares) when the market price was $13 per share. (HINT: Reconstruct the journal entry. Look back at the chapter 13 notes for a small stock dividend.) 2. Issuance of 2 million shares for cash when the market price was $13 per share. (HINT: Reconstruct the journal entry.) h. Cash dividends were declared and paid to shareholders in 2021. (HINT: You must determine the amount of cash dividends declared and paid.) Required: Prepare an entire 2021 Statement of Cash Flows (all three sections) using the indirect method for the Operating Activities section. All of the numbers in your completed Statement of Cash Floys must be cell references to other numbers in this worksheet. EXTRA CREDIT: The following is optional. Prepare the Operating Activities using the direct method. [You must first prepare the Operating Activites using the indirect method as required above.) You may earn 10 points of extra credit if, in addition to preparing the Operating Activities using the indirect method, you also prepare the Operating Activities using the direct method. United Brands Corporation Balance Sheets December 31, 2021 and 2020 ($ in millions) 2021 2020 $41 32 ASSETS Current Assets Cash Accounts receivable Inventory Prepaid insurance Property, Plant, & Equipment: Land Equipment Less: Accumulated depreciation Total Assets $20 30 50 6 W 60 75 (20) $221 (16) $267 $26 3 6 34 $20 1 8 47 LIABILITIES Current Liabilities: Accounts payable Salaries payable Income tax payable Notes payable, current Long-term Liabilities: Notes payable, long-term EQUITY Common stock, $10 par, 50 million shares authorized, 13 million issued in 2021, 10 million issued in 2020 Paid-in capital in excess of par-common stc Retained Earnings Total Liabilities and Equity 20 0 $130 $100 29 19 $267 20 25 $221 United Brands Corporation Income Statement for the year ended December 31, 2021 ($ in millions) $100 (60) (13) Sales revenue Cost of goods sold Gross profit Operating expenses: Salaries expense Depreciation expense Insurance expense Income from operations Other income and expenses: Interest expense Gain on sale of land Loss on sale of equipment Income before taxes Income tax expense Net income 288 289 290 291 Additional information for 2021 transactions: a. All inventory is purchased on account, and the Accounts Payable account is used exclusively for inventory purchases. b. In 2021, a portion of the company land was sold for $18 million in cash. This land was originally purchased in a previous year for $10 million. o. Land was purchased in 2021 for $30 million cash for use as a parking lot. d. Equipment was sold in 2021 that had an Accumulated Depreciation balance of $7 million on the date of sale. The equipment originally cost $14 million and was sold at a loss for cash. (HINT: You must determine the amount of cash received. Reconstruct the journal entry.) e. In 2021, new equipment was acquired by issuing a 127, five-year, $20 million note payable to the seller. 1. During 2021, $55 million of short-term (current) notes payable were paid in cash and $42 million of cash was borrowed in the form of short-term debt (current notes payable). g. The increase in the common stock account is attributed to two transactions: 1. Issuance of a 10% stock dividend (1 million shares) when the market price was $13 per share. (HINT: Reconstruct the journal entry. Look back at the chapter 13 notes for a small stock dividend.) 2. Issuance of 2 million shares for cash when the market price was $13 per share. (HINT: Reconstruct the journal entry.) h. Cash dividends were declared and paid to shareholders in 2021. (HINT: You must determine the amount of cash dividends declared and paid.)