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The income statement, balance sheets, and additional information for Great Adventures, Inc., are provided below. GREAT ADVENTURES, INC. Income Statement For the Year Ended December

The income statement, balance sheets, and additional information for Great Adventures, Inc., are provided below.

GREAT ADVENTURES, INC. Income Statement For the Year Ended December 31, 2020
Revenues:
Service revenue (clinic, racing, TEAM) $ 533,000
Sales revenue (MU watches) 108,000
Total revenues $ 641,000
Expenses:
Cost of goods sold (watches) 65,000
Operating expenses 303,776
Depreciation expense 45,000
Interest expense 29,224
Income tax expense 54,000
Total expenses 497,000
Net income $ 144,000

GREAT ADVENTURES, INC. Balance Sheets December 31, 2020 and 2019
2020 2019 Increase (I) or Decrease (D)
Assets
Current assets:
Cash $ 289,666 $ 133,000 $ 156,666 (I)
Accounts receivable 37,500 30,000 7,500 (I)
Inventory 16,250 13,500 2,750 (I)
Other current assets 12,250 10,500 1,750 (I)
Long-term assets:
Land 450,000 0 450,000 (I)
Buildings 1,000,000 0 1,000,000 (I)
Equipment 60,000 60,000
Accumulated depreciation (69,000) (24,000) 45,000 (I)
Total assets $ 1,796,666 $ 223,000
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 11,250 $ 8,500 $ 2,750 (I)
Interest payable 700 700
Income tax payable 54,000 35,500 18,500 (I)
Long-term liabilities:
Notes payable 439,916 27,500 412,416 (I)
Stockholders' Equity:
Common stock 120,000 20,000 100,000 (I)
Paid-in capital 1,106,000 0 1,106,000 (I)
Retained earnings 160,800 130,800 30,000 (I)
Treasury stock (96,000) 0 (96,000) (I)
Total liabilities and stockholders equity $ 1,796,666 $ 223,000

Additional Information for 2020:

1. Borrowed $450,000 in January 2020. Made 12 monthly payments during the year, reducing the balance of the loan by $37,584.

2. Issued common stock for $1,200,000.

3. Purchased 12,000 shares of treasury stock for $16 per share.

4. Reissued 6,000 shares of treasury stock at $17 per share.

5. Declared and paid a cash dividend of $114,000.

Required:

Prepare the statement of cash flows for the year ended December 31, 2020, using the indirect method. (List cash outflows as negative amounts.)

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GREAT ADVENTURES, INC. Statement of Cash Flows For the Year Ended December 31, 2020 Cash Flows from Operating Activities $ 144,000 Net income Adjustments to reconcile net income to net cash flows from operating activities: Depreciation expense Increase in accounts receivable Decrease in inventory Increase in other current assets Increase in accounts payable Increase in income tax payable 45,000 (7,500) (2,750) (1,750) 2,750 18,500 Net cash flow from operating activities $ 198,250 Cash Flows from Investing Activities (450,000) (1,000,000) Purchase of land Purchase of buildings

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