Laura?s Fresh Cooking Inc. began operations on January 1, 2019. Laura?s prepares gourmet dinners and delivers to customers in fresh coolers; customers put them in the oven and have a meal within 30 minutes. The business seems to be a success! Its post-closing trial balance at December 31, 2019 and 2020 is shown below along with some other information.

Other information regarding Laura?s Fresh Cooking Inc. and its activities during 2020:

1. Assume all accounts have normal balances.

2. Cash dividends were declared and paid during the year.

3. There were no sales of property, plant, and equipment assets during the year.

4. Investments were sold for cash at their original cost.

Required

Using the information provided, prepare a statement of cash flows (applying the direct method) for the year ended December 31, 2020.

Transcribed Image Text:

Laura's Fresh Cooking Inc. Laura's Fresh Cooking Inc. Post-Closing Trlal Balance Income Statement For Year Ended December 31, 2020 December 31 Revenues: Account 2020 2019 $38,640 Sales. $36,800 $19,200 Cash. Receivables. Cost of goods sold. 16,160 28,700 21,600 Gross profit. $2,480 Merchandise inventory. 26,400 32,100 Expenses: 31,200 Property, plant, and equipment. 28,000 Other expenses. $8,000 Accumulated depreciation. 20,000 18,400 Depreciation expense. Total operating expenses. 1,600 Investments. 21,600 23,200 9,600 Accounts payable. Accrued liabilities. Bonds payable. 15,200 20,000 Profit from operations $12,880 4,800 3,200 Income tax expense.. 2,880 30,300 32,000 $10,000 Profit. Common shares 31,200 22,500 Retained earnings.. 40,000 31,200