Following is a partially completed balance sheet for Hoeman Inc. at December 31, 2020, together with comparative data for the year ended December 31, 2019. From the statement of cash flows for the year ended December 31, 2020, you determine the following: • Net Income for the year ended December 31, 2020, was $98,000, Dividends paid during the year ended December 31, 2020, were $66,000. • Accounts receivable decreased $10,000 during the year ended December 31, 2020. The cost of new buildings acquired during 2020 was $133,500. No buildings were disposed of during 2020. The land account was not affected by any transactions during the year, but the fair value of the land at December 31, 2020, was $194,000. Required: a. Complete the December 31, 2020, balance sheet. (Hint: Long-term debt is the last number to compute to make the balance sheet balance.) b. Prepare a statement of cash flows for the year ended December 31, 2020, using the Indirect method. Complete this question by entering your answers in the tabs below. Required A Prepare a statement of cash flows for the year ended December 31, 2020, using the indirect method. (Amounts to be deducted should be indicated by a minus sign.) Required B HOEMAN INC. Statement of Cash Flows For the Year Ended December 31, 2020 Cash flows from operating activities: Adi (dadunt) itame not affecting anch Cash paid to acquire new buildings Cash received from issuance of common stock Cash received from issuance of long-term debt Decrease in accounts payable Cash flows from investing activities: Cash flows from financing activities: Cash balance, January 1, 2020 Cash balance, December 31, 2020 < Required A Required B >
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
