QS 16-7 Indirect: Computing cash from operations LO P2 A comparative balance sheet and income statement is shown for Cruz, Inc. 2018 CRUZ, INC. Comparative Balance Sheets December 31, 2019 2019 Assets Cash $ 94,800 Accounts receivable, net 41,000 Inventory 85,800 Prepaid expenses 5,400 Total current assets 227,000 Furniture 109,000 Accum. depreciation-Furniture (17,000) Total assets $319,000 Liabilities and Equity Accounts payable $ 15,000 Wages payable 9,000 Income taxes payable 1,400 Total current liabilities 25, 400 Notes payable (long-term) 29,000 Total liabilities 54,400 Equity Common stock, $5 par value 229,000 Retained earnings 35,600 Total liabilities and equity $319,000 $ 24,000 51,000 95, 800 4,200 175,000 119,000 (9,000) $285,000 $ 21,000 5,000 2,600 28,600 69,000 97,600 179,000 8, 400 $285,000 CRUZ, INC. Income Statement For Year Ended December 31, 2019 Sales $488,000 Cost of goods sold 314,000 Gross profit 174,000 Operating expenses Depreciation expense $37,600 Other ex nses 89, 100 126,700 Income before taxes 47, 300 Income taxes expense 17,300 Net income $ 30,000 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 0 $