LAG Network Inc.?s balance sheet and income statement are as follows:

Additional information regarding LAG Network Inc.?s activities during 2020:

a. Equipment is purchased for $14,400 cash.

b. 8,200 common shares are issued for cash at $2.50 per share.

c. Declared and paid $48,800 of cash dividends during the year.

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.

Analysis Component: Assume that LAG Network Inc. had a loss instead of a profit. Does a loss mean that there will always be a cash outflow from operating activities on the statement of cash flows?

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