Use the following information for the Quick Study below. (Algo)Skip to question [The following information applies to the questions displayed below.]A comparative balance sheet and income statement is shown for Cruz, Incorporated.CRUZ, INCORPORATEDComparative Balance SheetsAt December 3120212020Assets Cash$ 66,100$ 16,600Accounts receivable, net28,50035,200Inventory59,70066,100Prepaid expenses3,7003,000Total current assets158,000120,900Furniture74,60085,000Accumulated depreciation—Furniture(11,600)(6,400)Total assets$ 221,000$ 199,500Liabilities and Equity Accounts payable$ 10,400$ 14,700Wages payable6,3003,500Income taxes payable1,0001,900Total current liabilities17,70020,100Notes payable (long-term)20,70050,500Total liabilities38,40070,600Equity Common stock, $5 par value159,500125,000Retained earnings23,1003,900Total liabilities and equity$ 221,000$ 199,500CRUZ, INCORPORATEDIncome StatementFor Year Ended December 31, 2021Sales$ 341,600Cost of goods sold219,800Gross profit121,800Operating expenses (excluding depreciation)62,400Depreciation expense26,300Income before taxes33,100Income taxes expense12,100Net income$ 21,000 Use the above balance sheet and income statement to prepare the operating activities section by direct method. Assume all the saleswere made on credit basis.Note: Amounts to be deducted should be indicated with a minus sign.Cash flows from operating activities$0

The financial ratios for Cruz, Incorporated, as of December 31, 2021, reflect a healthy financial…

Answered: Use the above balance sheet and income…

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter8: Internal Control And Cash

Section: Chapter Questions

Problem 5PEB

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

CRUZ, INCORPORATED
Comparative Balance Sheets
At December 31	2021	2020
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
Accumulated 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 liabilities	17,700	20,100
Notes payable (long-term)	20,700	50,500
Total liabilities	38,400	70,600
Equity
Common stock, $5 par value	159,500	125,000
Retained earnings	23,100	3,900
Total liabilities and equity	$ 221,000	$ 199,500

CRUZ, INCORPORATED
Income Statement
For Year Ended December 31, 2021
Sales	$ 341,600
Cost of goods sold	219,800
Gross profit	121,800
Operating expenses (excluding depreciation)	62,400
Depreciation expense	26,300
Income before taxes	33,100
Income taxes expense	12,100
Net income	$ 21,000