Refer to the information in Problem 16-1B. Prepare a statement of cash flows for 2020 using the direct method to report cash inflows and outflows from operating activities.

Other information:

a. All sales were credit sales.

b. All credits to accounts receivable in the period were receipts from customers.

c. Purchases of merchandise were on credit.

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

e. The other operating expenses were cash expenses.

f. The decrease in income taxes payable was for payment of taxes.

16-1B

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