Question

CRUZ, INC Comparative Balance Sheets December 31, 2019 2019 2018 Assets Cash 72,900 18,100 31,300 65,600 4000 Accounts receivable, net Inventory Prepaid expenses 38,400 72,100 3,300 Total current asseta 173,800 131,900 93,500 Furniture 80,600 (12,500) Accum. depreciation-Purniture (7,100) $218,300 $241,900 Total assets Liabilitios and Equity Aееounta payable Wages payable Ineone taxes payable Total current 1iabilities $11,400 6,800 1,200 19,400 24,800 44.200 16,100 3,800 2,100 22,000 55,800 77.800 Notes payable (long-tern) Total liabilities Equity Common stock, $5 par value Retained earnings Total liabilities and equity 170,300 27,400 $241,900 134,800 5,700 $218,300 CRU, INC Income Statement For Year Ended December 31, 2019 Sales $373,800 240,600 133,200 Cost of goods sold Gross profit Operating expenses Depreciation еxpense other expenses 28,800 68,300 97,100 36,100 13,100 Income before taxes Incone taxeв ехpense $23,000 Net income Use the above balance sheet and income statement to prepare the operating activities section by direct method. Assume all the sales were made on credit basis. (Amounts to be deducted should be indicated with a minus sign.) Cash flows from operating activities Payments for inventory Payments for other expenses Payments for taxes Receipts from sales to customers Net cash provided by operating activities 0 The following income statement and additional year-end information is provided. SONAD COMPANY Income Statement For Year Ended December 31 $1,911,000 936,390 974,610 Sales Cost of goods sold Gross profit Operating expenses Salaries expense Depreciation expense Rent expense Amortization expenses-Patenta Utilities expense $261,807 45,864 51,597 5,733 21,021 386,022 588,588 7,644 $ 596,232 Gain on sale of equipment Net income $27,050 inerease 18,200 increase Accounts payable Salaries payable Accounts receivable $15,875 decrease 5,100 deereаве Inventory Prepare the operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) Answer is not complete. Statement of Cash Flows (partial) Cash flows from operating activities 23,000 Net income Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Depreciation expense Changes in current operating assets and liabilities Increase in accounts receivable 7,100 6,500 Increase in inventory 36,600

Answer 1

$ 380,900 Statement of Cash Flows (partial) Cash flows from Operating Activities: Collections from Customers Cash Payments Cash paid for Inventory Cash paid for Operating expenses Cash apid for Income Tax Expenses Net Cash provided by Operating activities Working Notes: 1 Cash Receipts from Customers Beginning Balance of Accounts Receivables Add: sales $ 238,800 $ 66,000 $ 14,000 $ 318.800 $ 62,100 $ 38,400 $ 373,800 $ 412,200 $ 31,300 $ 380,900 Less: Closing Balance of Accounts Receivables 2 Cash paid for Inventory Cost of Goods sold Add :Beginning accounts payable Less: Ending accounts payable $ 240,600 $ 16,100 $ 256,700 $ 11,400 $ 245,300 $ 65,600 $ 72,100 $ 238,800 Add: Closig Inventory Less: Opening inventory

$ 68,300 3 Payment of operating Expenses Other Expenses Add: Closing prepaid Expenses Opening wages Payable $ $ $ 4,000 3,800 76,100 Less: Opening Prepaid Expenses Closing Wages Payable $ $ $ (3,300) (6.800) 66,000 4 Cash paid for Income Tax Expenses Opening Balance of Income Tax payable Add: income Tax Expenses $ $ $ $ $ 2.100 13,100 15,200 1,200 14,000 Less: Closing Balance of Income Tax payable $ 596,232 Statement of Cash Flows (partial) Cash flow from Operating Activities: Net Income Adjustments to reconcile net income to net Cash flow from operating activities: Income statement items not effecting cash Depreciation expenses $ 45,864

Changes in Current operating assets and liabilities Increase in Accounts Receivables Increase in Inventory Decrease in accounts payable Decrease in salaries payable Net cash provided by operating activities $ (27,050) $ (18,200) $ (15,875) $ (5,100 $ (20,361) $ 575,871