Paddleboard Inc. began operations on January 1, 2019. Its post-closing trial balance at December 31, 2019 and 2020, is shown below along with some other information.

Other information regarding Paddleboard 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 indirect method) for the year ended December 31, 2020.

Analysis Component:

a. Paddleboard Inc. experienced an increase in cash during 2020. Does this necessarily represent a favourable situation? Explain why or why not.

b. Explain the causes of change in Paddleboard Inc.?s cash situation during 2020.

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Paddleboard Inc. Paddleboard Inc. Income Statement Post-Closing Trial Balance (000s) For Year Ended December 31, 2020 (000s) December 31 Revenues: Account 2020 2019 Sales. 3,784 $2,880 $1,840 Cash. 1,536 Cost of goods sold. Receivables. 2,800 2,080 Gross profit. 2,248 Merchandise inventory. 2,560 3,040 Expenses: Property, plant, and equipment. 3,040 2,720 Other expenses. 880 Accumulated depreciation 1,920 1,840 Depreciation expense Total operating expenses. Profit from operations. Income tax expense. 80 Investments. 2,080 2,240 960 Accounts payable. 1,920 1,440 1,288 Accrued liabilities.. 320 480 288 Bonds payable. 2,240 2,400 Profit 1,000 Common shares. 3,040 2,720 Retained earnings. 3,920 3,040