Triple Flip Inc., a sporting goods retailer, recently completed its 2020 operations. Triple Flip Inc.?s balance sheet information and income statement follow.

Additional information regarding Triple Flip Inc.?s activities during 2020:

1. Loss on sale of equipment is $2,058.

2. Equipment costing $49,980 is sold for $27,489.

3. Equipment is purchased by paying cash of $37,485 and signing a long-term note payable for the balance.

4. Borrowed $5,880 by signing a short-term note payable.

5. Reduced a long-term note payable by making a payment.

6. Issued 2,940 common shares for cash at $11 per share.

7. Declared and paid cash dividends.

Required

Prepare a statement of cash flows for 2020 that reports the cash inflows and outflows from operating activities according to the indirect method. Show your supporting calculations. Also prepare a note describing non-cash investing and financing activities.

Analysis Component: Using the information from the statement of cash flows just prepared for Triple Flip Inc., identify the accrual basis profit and the cash basis profit for 2020. Explain why there is a difference between the two amounts.

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Triple Flip Inc. Triple Flip Inc. Comparative Balance Sheet Information Income Statement For Year Ended December 31, 2020 December 31 Sales 1,061,340 2020 2019 Cost of goods sold. 573,300 $133,770 $ 70,119 Cash. Gross profit. 488,040 Accounts receivable. 72,618 88,935 Operating expenses: Depreciation expense Other expenses. Merchandise inventory. 445,410 480,396 35,868 Prepaid expenses. 16,758 18,816 384,993 Equipment. 272,685 211,680 Total operating expenses. Profit from operations. Accumulated depreciation. Accounts payable. 420,861 106,575 91,140 67,179 115,101 120,981 Loss on sale of equipment. 2,058 Current notes payable. 16,905 11,025 Profit before taxes. 65,121 Notes payable. Common shares. Retained earnings. 110,250 80,850 Income taxes 9,261 473,340 441,000 Profit. 55,860 119,070 124,950