GL1201 (Algo) - Based on Exercise 12-11 LO P2, P3, A1 Use the following financial statements and additional information. BARCELONA INCORPORATED Comparative Balance Sheets June 30, 2019 and 2018 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 2019 2018 $ 86,300 78,000 66,000 $ 41,700 61,000 92,000 5,000 6,300 235,300 201,000 153,000 (39,000) $ 349,300 $ 30,000 8,000 142,000 (13,000) $ 330,000 $ 36,000 19,000 3,600 4,000 41,600 59,000 38,000 75,000 79,600 134,000 220,000 160,000 49,700 $ 349,300 36,000 $ 330,000 Sales Cost of goods sold BARCELONA INCORPORATED Income Statement For Year Ended June 30, 2019 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 $ 68,000 77,000 $ 803,000 491,000 312,000 $ 145,000 167,000 3,300 170,300 52,130 $ 118,170 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 $67,000 cash. d. Received cash for the sale of equipment that had cost $56,000, yielding a $3,300 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. Requirement General Journal General Ledger Indirect Trial Balance Direct Method Method Requirement Answer is not complete. General Journal General Trial Balance Direct Method Ledger Indirect Method Using the income statement, the comparative balance sheet, and the additional information given above, reconstruct the entries for the summarized activity of the current fiscal year. Upon completion, the trial balance tab should agree with the June 30, 2019 balances. No 1 Date June 30 Cash Accounts receivable, net Sales Account Title < Requirement General Ledger Debit Credit 37,000 19,000 2,365,000 Requirement General Journal General Ledger Trial Balance Direct Method Indirect Method As your reconstructed entries are recorded, you will explain the changes in the beginning and ending balances for each account. Unadjusted General Ledger Account Cash Accounts receivable, net No. Date Debit Credit Balance No. June 30 41,700 1 June 30 37,000 78,700 1 Date June 30 June 30 Debit Credit Balance 61,000 19,000 80,000 Inventory Prepaid expenses No. Date June 30 Debit Credit Balance No. Date Debit Credit Balance 92,000 June 30 6,300 Accumulated depreciation - Equipment Equipment No. Date Debit Credit Balance No. Date Debit Credit Balance No. Date Debit Credit Balance No. Date Debit Credit Balance June 30 142,000 June 30 13,000 Accounts payable No. Date Debit June 30 Credit Balance No. Date Wages payable Debit Credit Balance 36,000 June 30 19,000 Income taxes payable No. Date June 30 Debit No. Date June 30 Credit Balance No. 4,000 Date June 30 Notes payable (long-term) Debit Credit Balance 75,000 Retained earnings Credit Balance No. Date Debit Credit Balance 160,000 June 30 36,000 Common stock, $5 par value Debit Sales No. Date Debit Credit Balance June 30 0 1 June 30 2,365,000 2,365,000 Unadjusted BARCELONA INCORPORATED Trial Balance June 30, 2021 Account Title Cash Accounts receivable, net Inventory Prepaid expenses Equipment Accumulated depreciation Equipment Accounts payable Wages payable Income taxes payable Notes payable (long-term) Common stock, $5 par value Retained earnings Sales Total 10 Debit Credit 78,700 80,000 92,000 6,300 142,000 13,000 36,000 19,000 4,000 75,000 160,000 36,000 2,365,000 399,000 $ 2,708,000 BARCELONA INCORPORATED Statement of Cash Flows (Direct Method) For Year Ended June 30, 2019 Cash flows from operating activities: Cash flows from investing activities: Cash flows from financing activities: Unadjusted Cash flows from operating activities: BARCELONA INCORPORATED Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2019 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