Homework SourseA comparative balance sheet and income statement is shown fo
A comparative balance sheet and income statement is shown for Cruz, Inc.
1. How much cash is paid to acquire inventory during year 2017?
Cash Paid for inventory:???
Use the above balance sheet and income statement to prepare the cash provided (used) from operating activities section by direct method. (Amounts to be deducted should be indicated with a minus sign.)
Cash flows from operating activities:
| CRUZ, INC. Comparative Balance Sheets December 31, 2017 | |||||||
| 2017 | 2016 | ||||||
| Assets | |||||||
| Cash | $ | 85,600 | $ | 21,300 | |||
| Accounts receivable, net | 36,800 | 45,200 | |||||
| Inventory | 77,100 | 84,900 | |||||
| Prepaid expenses | 4,700 | 3,900 | |||||
| Total current assets | 204,200 | 155,300 | |||||
| Furniture | 94,700 | 110,500 | |||||
| Accum. depreciation—Furniture | (14,700 | ) | (8,400 | ) | |||
| Total assets | $ | 284,200 | $ | 257,400 | |||
| Liabilities and Equity | |||||||
| Accounts payable | $ | 13,400 | $ | 19,000 | |||
| Wages payable | 8,000 | 4,500 | |||||
| Income taxes payable | 1,400 | 2,500 | |||||
| Total current liabilities | 22,800 | 26,000 | |||||
| Notes payable (long-term) | 28,900 | 66,400 | |||||
| Total liabilities | 51,700 | 92,400 | |||||
| Equity | |||||||
| Common stock, $5 par value | 204,000 | 162,300 | |||||
| Retained earnings | 28,500 | 2,700 | |||||
| Total liabilities and equity | $ | 284,200 | $ | 257,400 | |||
Solution
1) Cash Paid to Acquire Inventory(Purchased made during the year)
Opening Inventory + Purchase = Sales + Closing Inventory
84,900 + Purchase = 283,700 + 77,100
Purchase = 360,800 - 84,900
= 275,900 $
Net Receipts = Sales + Accounts Receivable (Beginning) - Accounts Receivable (Ending)
Net Receipts = 440,700 + 45,200 - 36,800 = 449,100
Net Payments = Purchase + Inventory (ending) + Accounts Payable (Beginning) - Inventory (Beginning) - Accounts Payable (Ending)
Net Payments = 275,900 + 77,100 + 19,000 - 84,900 - 13,400 = 273,700
| Cash Flow from Revenue (Net Receipts) | 449,100 |
| Less: Cash Payments for Expenses | 273,700 |
| Income Before Income Taxes | 175,400 |
| Less : Cash Payment for Income Taxes | 15,500 |
| Net Cash Provided by Operating Activities | 159,900 |
