Required information Use the following information for the Quick Study below. [T

Question

Required information

Use the following information for the Quick Study below.

[The following information applies to the questions displayed below.]

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

   

QS 12-11 Indirect: Computing cash from operations LO P2

Required:
Use the indirect method to prepare the cash provided or used from operating activities section only of the statement of cash flows for this company. (Amounts to be deducted should be indicated with a minus sign.)

CRUZ, INC.
Comparative Balance Sheets
December 31, 2017 2017 2016 Assets Cash $ 62,800 $ 15,700 Accounts receivable, net 27,000 33,300 Inventory 56,600 62,500 Prepaid expenses 3,500 2,900 Total current assets 149,900 114,400 Furniture 70,500 82,200 Accum. depreciation—Furniture (10,900 ) (6,200 ) Total assets $ 209,500 $ 190,400 Liabilities and Equity Accounts payable $ 9,900 $ 14,000 Wages payable 5,900 3,300 Income taxes payable 1,000 1,800 Total current liabilities 16,800 19,100 Notes payable (long-term) 20,700 47,800 Total liabilities 37,500 66,900 Equity Common stock, $5 par value 150,000 121,000 Retained earnings 22,000 2,500 Total liabilities and equity $ 209,500 $ 190,400

Explanation / Answer

Answer:

Statement of Cash Flows In $ 2017 Cash flows from operating activities Profit before taxation 31,600 Adjustments to reconcile net income to operating cash flow Depreciation 25,100 Investment income -    Interest expense -    Profit / (Loss) on the sale of property, plant & equipment -    Changes in current operating assets and liabilities (Increase) / Decrease in trade and other receivables 6,300.00 (Increase) / Decrease in inventories 5,900.00 (Increase) / Decrease in prepaid expenses -600.00 Increasse / (Decrease) in wages payables 2,600.00 Increase / (Decrease) in trade payables -4,100.00 (a)Cash generated from operations (Total of above) 66,800.00 (b)Income taxes paid(1800+11500-1000) -12,300.00 Net cash from operating activities(a-b) 54,500.00

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