Additional information: A) A $37,000 note payable is retired at its $37,000 carrying (book) value in exchange for cash.B) The only changes affecting retained earnings are net income and cash dividends paid.C) New Equipment is acquired for $83,000 cash.D)Received cash for the sale of equipment that had cost $69,000 yielding a $6,500 gain.E)Prepaid Expanses and Wages Payable relate to Other Expenses on the income statement.F) All purchases and sales of inventory are on credit **REQUIREMENTS: 1) General journal tab - Reconstruct the entries to summarize the activity between June 30, 2018 and June 30, 2019.2) Direct method tab- Prepare the statement of cash flows for the year ended June 30,2019 using the direct method.3)Indirect method tab- Prepare the reconciliation to the direct method

Use the following financial statements and additional information. MARCELLUS INCORPORATED Comparative Balance Sheets June 30, 2019 and 2018 2019 2018 Assets Cash $ 62, 300 $ 11, 300 Accounts receivable, net 78, 000 61, 000 Inventory 66, 000 080 '76 Prepaid expenses 6,000 7, 500 Total current assets 212, 300 171, 800 Equipment 192, 000 178, 000 Accumulated depreciation-Equipment (48, 000) 16,000 Total assets $ 356, 300 $ 333, 800 Liabilities and Equity Accounts payable $ 30, 000 $ 36,000 Wages payable 6,000 16, 000 Income taxes payable 4, 300 4, 800 Total current liabilities 40, 300 56, 800 Notes payable (long term) 38 ,000 75,000 Total liabilities 78, 300 131, 800 Equity Common stock, $5 par value 220,000 160, 006 Retained earnings 58, 000 42, 080 Total liabilities and equity $ 356, 300 $ 333, 800 MARCELLUS INCORPORATED Income Statement For Year Ended June 30, 2019 Sales $ 1, 018, 090 Cost of goods sold 623, 000 Gross profit Operating expenses 395, 000 Depreciation expense $ 85, 000 Other expenses 101, 000 Total operating expenses $ 186,000 Other gains (losses) 209, 000 Gain on sale of equipment Income before taxes 6,500 Income taxes expense 215, 500 Net income 65, 960 $ 149, 540