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

LAG Network Inc.
Income Statement
For Year Ended December 31, 2020
Sales				$	935,600
Cost of goods sold					563,200
Gross profit				$	372,400
Operating expenses:
Depreciation expense	$	25,200
Other expenses		239,800
Total operating expenses					265,000
Profit from operations				$	107,400
Income taxes					25,600
Profit				$	81,800

LAG Network Inc.
Comparative Balance Sheet Information
	December 31
Assets	2020				2019
Cash	$	81,260			$	55,800
Accounts receivable		49,400				39,000
Merchandise inventory		281,140				257,600
Equipment		161,400				139,800
Accumulated depreciation		(78,800	)			(53,600	)
Total assets	$	494,400			$	438,600
Liabilities and Equity
Accounts payable	$	38,200			$	50,800
Income taxes payable		18,600				17,200
Common shares		370,000				327,000
Retained earnings		67,600				43,600
Total liabilities and equity	$	494,400			$	438,600

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

*Equipment is purchased for $21,600 cash.

**17,200 common shares are issued for cash at $2.50 per share.

***Declared and paid $57,800 of cash dividends during the year.

Other information regarding LAG Network Inc.:

*All sales are credit sales.

**All credits to accounts receivable are receipts from customers.

***All purchases of merchandise are on credit.

****All debits to accounts payable result from payments for merchandise.

*****Other operating expenses are cash expenses.

******The only decrease in income taxes payable is for payment of taxes.

Required: Prepare a statement of cash flows for 2020 using the direct method to report cash inflows and outflows from operating activities. (List any deduction in cash and cash outflows as negative amounts.)

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