Question

2018 CRUZ, INC. Comparative Balance Sheets December 31, 2019 2019 Assets Cash $ 62,800 Accounts receivable, net 27.000 Inventory 56,600 Prepaid expenses 3,500 Total current assets 149,900 Furniture 70,500 Accum. depreciation-Furniture (10,900) Total assets $209,500 Liabilities and Equity Accounts payable $ 9,900 Wages payable 5,900 Income taxes payable 1.000 Total current liabilities 16,800 Notes payable (long-term) 20,700 Total liabilities 37,500 Equity Common stock, $5 par value 150,000 Retained earnings 22.000 Total liabilities and equity $209,500 $ 15,700 33.300 62,500 2,900 114,400 82,200 (6,200) $190,400 $ 14,000 3,300 1,800 19,100 47,800 66,900 121,000 2.500 $190,400 CRUZ, INC. Income Statement For Year Ended December 31, 2019 Sales $326.000 Cost of goods sold 209800 Gross profit 116,200 Operating expenses Depreciation expense 25.100 Other expenses 59,500 84,600 Income before taxes 31,600 Income taxes expense 11,500 Net income $ 20,100 1. How much cash is paid to acquire inventory during year 2019? 2. How much cash is paid for "other expenses" during year 2019? Hint: Examine prepaid expenses and wages payable 1. 2. Cash paid for inventory Cash paid for other expenses 2.) Fitz Company reports the following information. Selected Annual Income Statement Data Selected Year-End Balance Sheet Data Net income $385,000 Accounts receivable decrease $57,200 Depreciation expense 46,000 Inventory decrease 47,500 Amortization expense 7,500 Prepaid expenses increase 6,100 Gain on sale of plant assets 7,200 Accounts payable decrease 8,800 Salaries payable increase 1,200 Use the indirect method to prepare the operating activities section of its statement of cash flows for the year ended December 31. (Amounts to be deducted should be indicated with a minus sign.) Statement of Cash Flows (partial) Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operating activities

Answer 1

IS S 208.000 57,500 1 Cash paid for Inventory 2 Cash paid for Other Expenses Working Notes: 1 Cash paid for Inventory Cost of Goods sold Add :Beginning accounts payable Less: Ending accounts payable 209.800 14,000 223.800 9.900 213.900 56,600 62.500 208.000 Add: Closig Inventory Less: Opening inventory 2 Cash paid for Other Expenses Other Expenses Add:Closing prepaid Expenses Opening wages Payable 59.500 3,500 3,300 66,300 (2.900 (5.900) 57,500 Less: Opening Prepaid Expenses Closing Wages Payable

385000 $ 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 Amortization Expense Gain on sale of plant assets Changes in Current operating assets and liabilities Decrease in Accounts Receivables Decrease in Inventory Increase Prepaid expenses Decrease in accounts payable Increase in salaries payable Net cash provided by operating activities 46,000 7,500 (7,200) $ $ $ 57,200 47,500 (6,100) (8,800) 1,200 522,300 $ $