ARNOLD INCORPORATED Comparative Balance Sheets June 30, 2021 and 2020 2021 S Assets Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Wages payable Income taxes payable Total current liabilities Notes payable (long term) Total liabilities Equity Common stock, $5 par value Retained earnings Total liabilities and equity ARNOLD INCORPORATED Income Statement For Year Ended June 30, 2021 $ 77,900 73,000 63,000 2020 $ 17,100 57,000 88,000 5,800 7,300 219,700 169,400 186,000 (45,000) $ 360,700 $ 26,000 8,000 4,000 172,000 (15,000) $ 326,400 $ 32,000 19,000 4,400 38,000 55,400 33,000 65,000 71,000 120,400 240,000 170,000 49,700 36,000 $ 360,700 $ 326,400 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense Other expenses Total operating expenses Other gains (losses) Gain on sale of equipment Income before taxes $ 81,000 97,000 $ 978,000 599,000 379,000 $ 178,000 201,000 5,800 206,800 Sales ARNOLD INCORPORATED Income Statement For Year Ended June 30, 2021 Cost of goods sold Gross profit Operating expenses Depreciation expense Other expenses Total operating expenses Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income Additional Information $ 81,000 97,000 $ 978,000 599,000 379,000 $ 178,000 201,000 5,800 206,800 63,300 $ 143,500 a. A $32,000 note payable is retired at its $32,000 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 $79,000 cash. d. Received cash for the sale of equipment that had cost $65,000, yielding a $5,800 gain. e. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement. f. All purchases and sales of inventory are on credit. Post-closing ARNOLD INCORPORATED Statement of Cash Flows (Direct Method) For Year Ended June 30, 2021 Cash flows from operating activities: Cash paid for dividends Cash flows from investing activities: Cash flows from financing activities: Cash paid for dividends Cash paid for equipment Cash paid for equipment Cash paid for equipment Net cash provided by investing activities Prepare the operating activities section of the statement of cash flows using the indirect method. Enter reductions to net cash provided by operating activities as negative values. Post-closing Cash flows from operating activities: ARNOLD INCORPORATED Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2021 Adjustments to reconcile net income to net cash provided by operating activities: Income statement items not affecting cash Changes in current operating assets and liabilities