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Lock & Key Inc. began operations on January 1, 2019. Its post-closing trial balance at December...

Lock & Key Inc. began operations on January 1, 2019. Its post-closing trial balance at December 31, 2019 and 2020, is shown below along with some other information. Lock & Key Inc. Income Statement For Year Ended December 31, 2020 (000s) Revenues: Sales $ 3,260 Cost of goods sold 2,890 Gross Profit 370 Expenses: Other expenses $ 720 Depreciation expense 240 Total expenses 960 Loss $ 590 Lock & Key Inc. Post-Closing Trial Balance (000s) December 31 Account 2020 2019 Cash $ 1,560 $ 1,200 Receivables 2,040 1,380 Merchandise inventory 1,980 2,220 Property, plant and equipment 3,660 3,900 Accumulated depreciation 1,380 1,320 Accounts payable 1,380 1,020 Accrued liabilities 240 360 Bonds payable 1,140 1,740 Common shares 3,024 1,570 Retained earnings 2,076 2,690 Other information regarding Lock & Key Inc. and its activities during 2020: Assume all accounts have normal balances. Cash dividends were declared and paid during the year. Equipment was sold for cash equal to its book value. Other information: All accounts payable balances result from merchandise purchases. All sales are credit sales. All credits to accounts receivable are receipts from customers. All debits to accounts payable result from payments for merchandise. All other expenses are cash expenses. Required: Prepare a statement of cash flows for 2020 using the direct method to report cash inflows and outflows from operating activities. cash flow statement with direct method.

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Expert Solution

Statement of cash flow
Cash flows from operating activities
Collection from customers 1380+3260-2040 2600
Payment to suppliers       (2,290)
Payment of other expenses 360+720-240 -840
Net cash from operating activities    (530.00)
Cash flows from investing activities
Sale of equipment (3900-3660)-((1320+240)-1380)- book value 60
Net cash used investing activities        60.00
Cash flows from financing activities
Cash payment of dividend 2076-(2690-590) -24
Issue of Common stock (3024-1570) 1454
Repayment of Bonds payable (1140-1740) -600
Net cash from financing activities      830.00
Net Increase in cash and cash equivalents     360.00
Cash and cash equivalents at beginning of period 1,200.00
Ending Balance     1,560.00
working
Payment to suppliers
COGS 2890
Add: ending Inventory 1980
Less: beg Inventory -2220
Purchases 2650
Add: Beg Accounts payable 1020
Less: ending Accounts payable -1380
Payment to suppliers 2290
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