QS 16-27B Direct: Computing cash from operations LO P5

CRUZ, INC. Comparative Balance Sheets December 31, 2019
		2019				2018
Assets
Cash	$	72,900			$	18,100
Accounts receivable, net		31,300				38,400
Inventory		65,600				72,100
Prepaid expenses		4,000				3,300
Total current assets		173,800				131,900
Furniture		80,600				93,500
Accum. depreciationFurniture		(12,500	)			(7,100	)
Total assets	$	241,900			$	218,300
Liabilities and Equity
Accounts payable	$	11,400			$	16,100
Wages payable		6,800				3,800
Income taxes payable		1,200				2,100
Total current liabilities		19,400				22,000
Notes payable (long-term)		24,800				55,800
Total liabilities		44,200				77,800
Equity
Common stock, $5 par value		170,300				134,800
Retained earnings		27,400				5,700
Total liabilities and equity	$	241,900			$	218,300

CRUZ, INC. Income Statement For Year Ended December 31, 2019
Sales				$	373,800
Cost of goods sold					240,600
Gross profit					133,200
Operating expenses
Depreciation expense	$	28,800
Other expenses		68,300			97,100
Income before taxes					36,100
Income taxes expense					13,100
Net income				$	23,000

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. (Amounts to be deducted should be indicated with a minus sign.)