Refer to the information in Problem 16-1A. Other information regarding LAG Network Inc.:

a. All sales are credit sales.

b. All credits to accounts receivable are receipts from customers.

c. All purchases of merchandise are on credit.

d. All debits to accounts payable result from payments for merchandise.

e. Other operating expenses are cash expenses.

f. The only decrease in income taxes payable is for payment of taxes.

Required

Prepare a statement of cash flows for 2020 using the direct method to report cash inflows and outflows from operating activities.

Problem 16-1A

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LAG Network Inc. LAG Network Inc. Income Statement Comparative Balance Sheet Information For Year Ended December 31, 2020 December 31 Sales.. $926,600 Assets 2020 2019 Cost of goods sold. 554,200 Cash . $ 81,170 $ 54,000 Gross profit. $372,400 Accounts receivable.. Merchandise inventory. 40,400 37,200 Operating expenses: 288,730 245,000 Depreciation expense. $ 25,200 Equipment . 152,400 138,000 Other expenses.. 227,800 Accumulated depreciation (44,600) $429,600 (69,800) Total operating expenses. Profit from operations. Income taxes.. 253,000 Total assets. $492,900 $119,400 Liabilitles and Equity 16,600 Accounts payable. $ 29,200 $ 41,800 Profit $102,800 Income taxes payable.. 9,600 8,200 Common shares.. 361,000 340,500 Retained earnings.. 93,100 39,100 Total liabilities and equity.. $492,900 $429,600