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.) (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.) 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 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 Purchase of equipment Net cash used for investing activities Cash flows from financing activities: Payment of dividends Payment of note payable Issuance of common shares Net cash used for financing activities Net increase in cash Cash balance, December 31, 2019 Cash balance. December 31, 2020 Comparative balance sheet Income statement Hallow Hardware Corp. Comparative Balance Sheet As at December 31, 2020 and 2019 December 31, 2020 2019 Hallow Hardware Corp. Income Statement For the Year Ended December 31, 2020 Revenues Increase (Decrease) $ $ 439,000 11,500 17,200 $ 41,800 84,000 Current assets: : Cash and cash equivalents Accounts receivable Inventories Prepaid expenses Property, plant, and equipment: Land Sales revenue Expenses: Cost of goods sold Salary expense Depreciation expense Other operating expense Interest expense 5,700$ 44,500 87,700 1,500 (2,700) (3,700) $ 185,300 76,600 2,300 800 4,700 10,700 Equipment, net 24,600 29,300 89,700 60,200 53,700 49,400 $ 288,700 $ 249,000 $ 29,500 4,300 39,700 Income tax expense 331,200 Total expenses Total assets Current liabilities: Accounts payable Salary payable $ 107,800 $ 33,500 $ Net income 35,100 $ 2.300 22,900 6.700 1,600 (4.400) (1,000) 23,900 Print Done Other accrued liabilities Long-term liabilities: Notes payable Shareholders' equity: Common shares 77,500 107.000 (29,500) 88,200 62.700 64,900 13,000 23,300 49.700 Retained earnings $ 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