QS 16-17 (Algo) Computing financing cash outflows LO P3

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

CRUZ, INCORPORATED

Comparative Balance Sheets At

December 31 2021 2020

Assets

Cash $ 99,000 $ 25,000

Accounts receivable, net 42,800 53,100

Inventory 89,600 99,700

Prepaid expenses 5,600 4,400

Total current assets 237,000 182,200

Furniture 113,000 124,700

Accumulated depreciationFurniture (17,600) (9,400)

Total assets $ 332,400 $ 297,500

Liabilities and Equity

Accounts payable $ 15,600 $ 21,900

Wages payable 9,400 5,200

Income taxes payable 1,500 2,700

Total current liabilities 26,500 29,800

Notes payable (long-term) 31,100 65,700

Total liabilities 57,600 95,500

Equity Common stock, $5 par value 238,600 190,000

Retained earnings 36,200 12,000

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

1. Assume that all common stock is issued for cash. What amount of cash dividends is paid during 2021?

2. Assume that no additional notes payable are issued in 2021. What cash amount is paid to reduce the notes payable balance in 2021?