BARCELONA INCORPORATED Comparative Balance Sheets June 30, 2021 and 2020 2021

Assets Cash $ 86,300. $ 41,700 Accounts receivable, net 78,000 61,00 Inventory 66,000 92,000 Prepaid expenses 5,000 6,300 Total current assets 235,300 201,000 Equipment 153,000 142,000 Accumulated depreciationEquipment (39,000) (13,000) Total assets $ 349,300 $ 330,000 Liabilities and Equity Accounts payable $ 30,000 $ 36,000 Wages payable 8,000 19,000 Income taxes payable 3,600 4,000 Total current liabilities 41,600 59,000 Notes payable (long term) 38,000 75,000 Total liabilities 79,600 134,000 Equity Common stock, $5 par value 220,000 160,000 Retained earnings 49,700 36,000 Total liabilities and equity $ 349,300 $ 30,000 BARCELONA INCORPORATED Income Statement For Year Ended June 30, 2021 Sales $ 803,000 Cost of goods sold 491,000 Gross profit 312,000 Operating expenses Depreciation expense $ 68,000 Other expenses 77,000 Total operating expenses $ 145,000 167,000 Other gains (losses) Gain on sale of equipment 3,300 Income before taxes 170,300 Income taxes expense 52,130 Net income $ 118,170 Additional Information A $37,000 note payable is retired at its $37,000 carrying (book) value in exchange for cash. The only changes affecting retained earnings are net income and cash dividends paid. New equipment is acquired for $67,000 cash. Received cash for the sale of equipment that had cost $56,000, yielding a $3,300 gain. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement. All purchases and sales of inventory are on credit.

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Account Title	Debit	Credit
1	June 30	Cash
		Accounts receivable, net
		Sales
2	June 30	Accounts payable
		Cost of goods sold
		Inventory
		Cash
3	June 30	Depreciation expense
		Accumulated depreciation - Equipment
4	June 30	Other expenses
		Wages payable
		Prepaid expenses
		Cash
5	June 30	Cash
		Accumulated depreciation - Equipment
		Gain on sale of equipment
		Equipment
6	June 30	Income taxes expense
		Income taxes payable
		Cash
7	June 30	Notes payable (long-term)
		Cash
8	June 30	Equipment
		Cash
9	June 30	Cash
		Common stock, $5 par value
10	June 30	Sales
		Gain on sale of equipment
		Income summary
11	June 30	Income summary
		Cost of goods sold
		Depreciation expense
		Other expenses
		Income taxes expense
12	June 30	Income summary
		Retained earnings
13	June 30	Retained earnings
		Cash