The 2020 comparative balance sheet and income statement of Hallow Hardware Corp. follow. Hallow had no non-cash investing and financing transactions during 2020. During the year, there were no sales of land or equipment, no issuance of notes payable, and no repurchase of shares transactions. (Click the icon to view the comparative balance sheet.) B (Click the icon to view the income statement.) Requirements 1. Prepare the 2020 statement of cash flows, formatting operating activities by using the indirect method. 2. How will what you learned in this problem help you evaluate an investment? Requirement 1. Prepare the 2020 statement of cash flows, formatting operating activities by using the indirect method. Start by completing the cash flows from operating activities. Then, continue with completing the investing and financing activities sections. Finally, determine the net increase in cash. (Use a minus sign or parentheses for subtracting numbers that are typically shown enclosed in parentheses in a statement of cash flows.) Income statement Comparative balance sheet Hallow Hardware Corp. Statement of Cash Flows For the Year Ended December 31, 2020 Cash flows from operating activities Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation Decrease in accounts receivable Decrease in inventories Hallow Hardware Corp. Income Statement Hallow Hardware Corp. Comparative Balance Sheet As at December 31, 2020 and 2019 For the Year Ended December 31, 2020 Revenues: Increase December 31, 2020 2019 Sales revenue $ 439,000 (Decrease) Current assets: $ Cash and cash equivalents Accounts receivable Increase in prepaid expenses Increase in accounts payable Decrease in salary payable Decrease in other accrued liabilities Net cash provided by operating activities Cash flows from investing activities: Purchase of land Expenses: Cost of goods sold Salary expense Depreciation expense Other operating expense Interest expense Income tax expense $ 185,300 76,600 4,700 10,700 24,600 29,300 17,200 $ 41,800 84,000 2,300 5,700 S 44,500 87,700 1,500 11,500 (2,700) (3,700) 800 Inventories Prepaid expenses Property, plant, and equipment: Land 89,700 53,700 60,200 49,400 29,500 4,300 Total expenses 331,200 Equipment, net $ 107,800 39.700 $ 288,700 $ 249,000 S Net income Total assets Purchase of equipment Net cash used for investing activities Cash flows from financing activities: Payment of dividends Payment of note payable $ 33,500 5 35,100 $ 2,300 1,600 (4,400) 6,700 Print Done Issuance of common shares 22,900 23,900 (1,000) Current liabilities: Accounts payable Salary payable Other accrued liabilities Long-term liabilities: Notes payable Shareholders' equity: Common shares Net cash used for financing activities Net increase in cash 77,500 107,000 (29,500) Cash balance, December 31, 2019 Cash balance, December 31, 2020 88,200 62,700 64,900 13,000 23,300 49,700 Retained earings $ 288,700 $ 249,000 $ 39,700 Total liabilities and shareholders' equity Requirement 2. How will what you learned in this problem help you evaluate an investment? A. Learn how companies prepare the statement of cash flows B. Learn how operating activities, investing activities, and financing activities generate cash receipts and cash payments C. Both A and B D. None of the above