QS $12-7($Algo$)$ Indirect: Computing cash from operations LO P$2$

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

CRUZ, INCORPORATED

Comparative Balance Sheets

At December $3120212020$

Assets

Cash $ $82,800$ $ $20,600$

Accounts receivable, net $35,50043,700$

Inventory $74,30082,000$

Prepaid expenses $4,6003,700$

Total current assets $197,200150,000$

Furniture $92,800104,800$

Accumulated depreciation$$Furniture $(14,400)(8,000)$

Total assets $ $275,600$ $ $246,800$

Liabilities and Equity

Accounts payable $ $13,000$ $ $18,200$

Wages payable $7,7004,300$

Income taxes payable $1,3002,400$

Total current liabilities $22,00024,900$

Notes payable $($long$-$term$)26,80063,700$

Total liabilities $48,80088,600$

Equity

Common stock, $$5$ par value $198,800155,300$

Retained earnings $28,0002,900$

Total liabilities and equity $ $275,600$ $ $246,800$

CRUZ, INCORPORATED

Income Statement

For Year Ended December $31,2021$

Sales $ $422,500$

Cost of goods sold $271,900$

Gross profit $150,600$

Operating expenses $($excluding depreciation$)77,100$

Depreciation expense $32,500$

Income before taxes $41,000$

Income taxes expense $14,900$

Net income $ $26,100$

Required:

Use the indirect method to prepare the operating activities section of Cruz$$s statement of cash flows.

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