A comparative balance sheet and income statement is shown for Cruz, Incorporated.

CRUZ, INCORPORATED

Comparative Balance Sheets

At December $3120212020$

Assets

Cash $ $99,000$ $ $25,000$

Accounts receivable, net $42,80053,100$

Inventory $89,60099,700$

Prepaid expenses $5,6004,400$

Total current assets $237,000182,200$

Furniture $113,000124,700$

Accumulated depreciation$$Furniture $(17,600)(9,400)$

Total assets $ $332,400$ $ $297,500$

Liabilities and Equity

Accounts payable $ $15,600$ $ $21,900$

Wages payable $9,4005,200$

Income taxes payable $1,5002,700$

Total current liabilities $26,50029,800$

Notes payable $($long$-$term$)31,10065,700$

Total liabilities $57,60095,500$

Equity

Common stock, $$5$ par value $238,600190,000$

Retained earnings $36,20012,000$

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 $ $31,400$

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.

Note: Amounts to be deducted should be indicated with a minus sign.