Question

A comparative balance sheet and income statement is shown for Cruz, Inc.

CRUZ, INC. Comparative Balance Sheets December 31, 2019
		2019				2018
Assets
Cash	$	75,900			$	18,900
Accounts receivable, net		32,600				40,100
Inventory		68,300				75,300
Prepaid expenses		4,200				3,500
Total current assets		181,000				137,800
Furniture		84,600				99,200
Accum. depreciation—Furniture		(13,100	)			(7,500	)
Total assets	$	252,500			$	229,500
Liabilities and Equity
Accounts payable	$	11,900			$	16,900
Wages payable		7,100				4,000
Income taxes payable		1,200				2,200
Total current liabilities		20,200				23,100
Notes payable (long-term)		24,800				58,400
Total liabilities		45,000				81,500
Equity
Common stock, $5 par value		177,300				141,500
Retained earnings		30,200				6,500
Total liabilities and equity	$	252,500			$	229,500

   

CRUZ, INC. Income Statement For Year Ended December 31, 2019
Sales				$	392,900
Cost of goods sold					252,900
Gross profit					140,000
Operating expenses
Depreciation expense	$	30,200
Other expenses		71,600			101,800
Income before taxes					38,200
Income taxes expense					13,900
Net income				$	24,300

Required:

Use the indirect method to prepare the operating activities section of the statement of cash flows. (Amounts to be deducted should be indicated with a minus sign.)
  

Answer 1

Statement of Cashflow (Indirect Method)
For the year ended December 31,2019
Net Income		$   24,300.00
Adjustment to reconcile Net income to net cash provided by operating Activities
Depreciation Expense (Given)	$ 30,200.00
Decrease in Account receivable ( Beg Bal. $ 40,100-End bal $ 32,600)	$    7,500.00
Decrease in Inventory (Beg Bal. $75,300-End Bal $68,300)	$    7,000.00
Increase in Prepaid Exp (Beg Bal. $3,500-End Bal $4,200)	$      -700.00
Decrease in Account Payable ( Beg Bal. $16,900- End Bal. $11,900)	$   -5,000.00
Increase in wage payable (Beg Bal $4,000- End Bal $7,100)	$    3,100.00
Decrease in income tax payable (Beg Bal $2,200- End Bal $1,200)	$   -1,000.00	$   41,100.00
Net Cash flow from operating Activities		$   65,400.00	A