MED Supplies Inc., a software retailer, recently completed its 2020 operations. The following information is available:

Additional information regarding MED Supplies Inc.?s activities during 2020:

1. Equipment was purchased for $64,848 cash.

2. Issued 3,360 common shares for cash at $28 per share.

3. Declared and paid $147,840 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: The net increase in cash during 2020 for MED Supplies Inc. was $49,560. Briefly explain what caused this change using the statement of cash flows prepared above.

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MED Supplies Inc. Comparative Balance Sheet Information MED Supplies Inc. Income Statement For Year Ended December 31, 2020 $1,365,840 December 31 2019 Sales Cost of goods sold.. Gross profi. Operating expenses: Depreciation expense Other expenses. Total operating expenses. Profit from operations.. 2020 $120,792 $ 71,232 43,512 392,784 236,208 108,192 86,184 10,080 463,680 125,160 624,960 Cash. Accounts receivable. Merchandise inventory. $ 740,880 52,080 313,320 171,360 68,544 $ 39,648 Equipment. Accumulated depreciation. Accounts payable. Income taxes payable. Common shares. Retained earnings. 402,696 442,344 $ 298,536 100,464 $ 198,072 79,800 15,120 369,600 74,928 Income taxes Profit.