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

CRUZ, INCORPORATED

Comparative Balance Sheets

At December

Assets

Cash $ $

Accounts receivable, net

Inventory

Prepaid expenses

Total current assets

Furniture

Accumulated depreciationFurniture

Total assets $ $

Liabilities and Equity

Accounts payable $ $

Wages payable

Income taxes payable

Total current liabilities

Notes payable longterm

Total liabilities

Equity

Common stock, $ par value

Retained earnings

Total liabilities and equity $ $

CRUZ, INCORPORATED

Income Statement

For Year Ended December

Sales $

Cost of goods sold

Gross profit

Operating expenses excluding depreciation

Depreciation expense

Income before taxes

Income taxes expense

Net income $

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.

Note: Amounts to be deducted should be indicated with a minus sign.A comparative balance sheet and income statement is shown for Cruz, Incorporated.

CRUZ, INCORPORATED

Comparative Balance Sheets

At December

Assets

Cash $ $

Accounts receivable, net

Inventory

Prepaid expenses

Total current assets

Furniture

Accumulated depreciationFurniture

Total assets $ $

Liabilities and Equity

Accounts payable $ $

Wages payable

Income taxes payable

Total current liabilities

Notes payable longterm

Total liabilities

Equity

Common stock, $ par value

Retained earnings

Total liabilities and equity $ $

CRUZ, INCORPORATED

Income Statement

For Year Ended December

Sales $

Cost of goods sold

Gross profit

Operating expenses excluding depreciation

Depreciation expense

Income before taxes

Income taxes expense

Net income $

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.

Note: Amounts to be deducted should be indicated with a minus sign.