Question

Required information A comparative balance sheet and income statement is shown for Cruz, Inc. 2016 CRUZ, INC. Comparative Balance Sheets December 31, 2017 2017 Assets Cash $ 69,200 Accounts receivable, net 29,700 Inventory 62,200 Prepaid expenses 3,800 Total current assets 164,900 Furniture 76,600 Accum. depreciation-Furniture (11,900) Total assets $229,600 Liabilities and Equity Accounts payable $ 10,800 Wages payable 6,400 Income taxes payable 1,100 Total current liabilities 18,300 Notes payable (long-term) 22,780 Total liabilities 41,000 Equity Common stock, $5 par value 162,900 Retained earnings 25,700 Total liabilities and equity $229,600 $ 17,200 36,500 68,500 3,100 125,300 87,800 (6,700) $206,400 $ 15,200 3,600 2,000 20,800 53, 100 73,900 127,800 4,700 $206,400 CRUZ, INC. Income Statement For Year Ended December 31, 2017 Sales $353,400 Cost of goods sold 227,500 Gross profit 125,900 Operating expenses Depreciation expense $27,200 Other expenses 64,500 91,700 Income before taxes 34,200 Income taxes expense 12,400 Net income $ 21,800

Answer 1

	SOLUTION :1
	RETAINED EARNINGS STATEMENT
	Beg. Balance	$                      4,700	$800.00	Dividend Paid
	Net Income	$                    21,800
	Total	$26,500	$800
	Ending Balance	$                    25,700
	CALCULATION: DIVIDEND PAID
	Beginning balace of Retained earnings=		$4,700
	Add: Net Income of the year		$21,800
	Total Available Balance		$26,500
	Less: Ending Balance		$25,700
	Difference is Dividend paid in cash		$800
	SOLUTION :2
	NOTES PAYABLE
	Beginning Balance	$53,100
			$30,400	Cash paid for reduce notes Payable
	Total	$53,100	$30,400
	Ending Balance	$22,700
	WORKING NOTES:
	CALCULATION OF CASH PAID ON NOTE PAYABLE
	Beginning Balance	$53,100
	Less: Ending Balance	$22,700
	Difference is paid in Cash	$30,400