QS 12-7 Indirect: Computing cash from operations LO P2 A comparative balance sheet and income statement is shown for Cruz, Inc. CRUZ, INC. Comparative Balance Sheets December 31, 2019 2019 2018 Assets Cash $ 66,100 $ 16,600 Accounts receivable, net 28,500 35,200 Inventory 59,700 66,100 Prepaid expenses 3,700 3,000 Total current assets 158,000 120,900 Furniture 74,600 85,000 Accum. depreciation Furniture (11,600) (6,400) Total assets $221,000 $199,500 Liabilities and Equity Accounts payable $ 10,400 $ 14,700 Wages payable 6,300 3,500 Income taxes payable 1,000 1,900 Total current Habilities 17,709 20, 100 Notes payable (long-term) 20,700 50, 500 Total liabilities 38,400 70, 500 Equity Common stock, $5 par value 159,500 125,000 Retained earnings 23,100 3,900 Total liabilities and equity $221,000 $199,500 ces CRUZ, INC Income Statement For Year Ended December 31, 2019 Sales $341,600 Cost of goods sold 219,800 Gross profit 121,800 Operating expenses Depreciation expense $26,300 Other expenses 62,400 88,700 Income before taxes 33, 100 Income taxes expense 12, 100 Net income $ 21,009 Required: Ise the indirect me $341,600 219,800 121,800 Cost of goods sold Gross profit Operating expenses Depreciation expense Other expenses Income before taxes Income taxes expense Net income $26,300 62,400 88,700 33, 100 12, 100 $ 21,000 Required: Use the Indirect method to prepare the operating activities section of the statement of cash flows. (Amounts to be deducted should be indicated with a minus sign.) Cash flows from operating activities Adjustments to reconcile net income to operating cash flow Income statement items not affecting cash Changes in current operating assets and liabilities