Covid, Inc. Comparative Balance Sheets December 31, 2020 and 2021

2020 /2021

Cash $12,160 $ 15,200

Account Receivable 5,400 2,425

Interest Receivable 2,500 2,900

Prepaid Rent 1,020 1,075

Inventory 27,000 20,550

PPE 51,600 38,500

Accumulated Depreciation (13,080) (8,000)

Total Assets $86,600 $72,650

Accounts Payable $23,100 $25,000

Wages Payable 2,620 4,050

Dividends Payable 3,100 5,100

Bonds Payable 15,000 10,000

Common Stock 9,000 13,000

Retained Earnings 33,780 15,500

Total Liabilities and Stockholders Equity $86,600 $72,650

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Covid, Inc. Income Statement For the Year Ending 12/31/21

Sales $31,200

Cost of Goods Sold 9,000

Gross Profit 22,200

Less:

Depreciation Expense 4,200

Rent Expense 600

Wages Expense 2,400

Operating Income 15,000

Other Income:

Gain on Sale of Equipment 180

Interest Revenue 4,800

Net Income $19,980

Assume that all sales are on account and all purchases of inventory are on account. Equipment was purchased for $9,000 cash during 2021.

Required: Prepare a Statement of Cash Flows for Covid, Inc. as of 12/31/21 using the direct method. Also prepare the schedule which reconciles Net Income and Operating Cash Flows.