You have been hired by J. Smith, a successful entrepreneur, to assist in analyz- ing the balance sheet for his two-year-old hotel, the Chicago Inn. The follow- ing are the condensed balance sheets of the Chicago Inn.

Chicago Inn Condensed Balance Sheets December 31, 20X1 and 20X2 20X1 20X2 Cash $ 30,000 $ 40,000 Accounts Receivable 190,000 225,000 Inventory 30,000 35,000 Property and Equipment (net) 1,400,000 1,500,000 Other Assets 200,000 100,000 Total Assets $1,850,000 $1,900,000 Accounts Payable $ 140,000 $ 135,000 Wages Payable 10,000 15,000 Current Maturities—LTD 50,000 50,000 Long-Term Debt 1,000,000 1,000,000 Total Liabilities 1,200,000 1,200,000 Owner’s Equity 650,000 700,000 Total Liabilities and Owner’s Equity —_ $1,850,000 $1,900,000 Required:

1. What was the change in cash during 20X2?

2. What were the total current assets at the beginning of 20X1?

3. What were the total current liabilities at the end of 20X1?
4. What was the amount of net working capital at the end of 20X2?
5. If property and equipment costing $130,000 was purchased during 20X2 and there were no property and equipment disposals, what was the depreciation expense for 20X2?
6. How did the change in accounts receivable from the two balance sheets impact cash flows for 20X2?
7. Based solely on the two balance sheets, how much long-term debt was borrowed in 20X2?
8. Assuming $25,000 of cash was “withdrawn” by J. Smith during 20X2 and that owner’s equity is impacted by only net income and withdrawals, what was the net income of the Chicago Inn during 20X2?