A comparative balance sheet and income statement is shown for Cruz, Incorporated.CRUZ, INCORPORATEDComparative Balance SheetsAt December 3120212020Assets Cash$ 99,000$ 25,000Accounts receivable, net42,80053,100Inventory89,60099,700Prepaid expenses5,6004,400Total current assets237,000182,200Furniture113,000124,700Accumulated depreciation—Furniture(17,600)(9,400)Total assets$ 332,400$ 297,500Liabilities and Equity Accounts payable$ 15,600$ 21,900Wages payable9,4005,200Income taxes payable1,5002,700Total current liabilities26,50029,800Notes payable (long-term)31,10065,700Total liabilities57,60095,500Equity Common stock, $5 par value238,600190,000Retained earnings36,20012,000Total liabilities and equity$ 332,400$ 297,500CRUZ, INCORPORATEDIncome StatementFor Year Ended December 31, 2021Sales$ 509,400Cost of goods sold327,800Gross profit181,600Operating expenses (excluding depreciation)92,900Depreciation expense39,200Income before taxes49,500Income taxes expense18,100Net income$ 31,400Required:Use the indirect method to prepare the operating activities section of Cruz’s statement of cash flows.Note: Amounts to be deducted should be indicated with a minus sign. Cash flows from operating activitiesAdjustments to reconcile net income to net cash provided by operating activitiesIncome statement items not affecting cashChanges in current operating assets and liabilities

The operating activities section of Cruz, Incorporated's statement of cash flows using the indirect…

Answered: Cash flows from operating activities…

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter16: Statement Of Cash Flows

Section: Chapter Questions

Problem 5EA: What adjustment(s) should be made to reconcile net income to net cash flows from operating...

CRUZ, INCORPORATED
Comparative Balance Sheets
At December 31	2021	2020
Assets
Cash	$ 99,000	$ 25,000
Accounts receivable, net	42,800	53,100
Inventory	89,600	99,700
Prepaid expenses	5,600	4,400
Total current assets	237,000	182,200
Furniture	113,000	124,700
Accumulated depreciation—Furniture	(17,600)	(9,400)
Total assets	$ 332,400	$ 297,500
Liabilities and Equity
Accounts payable	$ 15,600	$ 21,900
Wages payable	9,400	5,200
Income taxes payable	1,500	2,700
Total current liabilities	26,500	29,800
Notes payable (long-term)	31,100	65,700
Total liabilities	57,600	95,500
Equity
Common stock, $5 par value	238,600	190,000
Retained earnings	36,200	12,000
Total liabilities and equity	$ 332,400	$ 297,500

CRUZ, INCORPORATED
Income Statement
For Year Ended December 31, 2021
Sales	$ 509,400
Cost of goods sold	327,800
Gross profit	181,600
Operating expenses (excluding depreciation)	92,900
Depreciation expense	39,200
Income before taxes	49,500
Income taxes expense	18,100
Net income	$ 31,400