GL1201 (Algo) - Based on Exercise 12-11 LO P2, P3, A1

Use the following financial statements and additional information.

SMITH INCORPORATED Comparative Balance Sheets June 30, 2019 and 2018
	2019	2018
Assets
Cash	$ 116,500	$ 60,500
Accounts receivable, net	68,000	53,000
Inventory	63,000	88,000
Prepaid expenses	4,400	5,500
Total current assets	251,900	207,000
Equipment	127,000	118,000
Accumulated depreciationEquipment	(33,000)	(11,000)
Total assets	$ 345,900	$ 314,000
Liabilities and Equity
Accounts payable	$ 26,000	$ 32,000
Wages payable	6,000	16,000
Income taxes payable	3,600	4,000
Total current liabilities	35,600	52,000
Notes payable (long term)	33,000	65,000
Total liabilities	68,600	117,000
Equity
Common stock, $5 par value	240,000	170,000
Retained earnings	37,300	27,000
Total liabilities and equity	$ 345,900	$ 314,000

SMITH INCORPORATED Income Statement For Year Ended June 30, 2019
Sales		$ 685,000
Cost of goods sold		419,000
Gross profit		266,000
Operating expenses
Depreciation expense	$ 60,000
Other expenses	68,000
Total operating expenses		$ 128,000
		138,000
Other gains (losses)
Gain on sale of equipment		2,100
Income before taxes		140,100
Income taxes expense		42,880
Net income		$ 97,220

Additional Information

1. A $32,000 note payable is retired at its $32,000 carrying (book) value in exchange for cash.
2. The only changes affecting retained earnings are net income and cash dividends paid.
3. New equipment is acquired for $59,000 cash.
4. Received cash for the sale of equipment that had cost $50,000, yielding a $2,100 gain.
5. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.
6. All purchases and sales of inventory are on credit.

1. Reconstruct the journal entry for cash receipts from customers, incorporating the change in the related balance sheet account(s), if any

2. Reconstruct the journal entry for cash payments for inventory, incorporating the change in the related balance sheet account(s), if any.

3. Reconstruct the journal entry for depreciation expense, incorporating the change in the related balance sheet account(s), if any.

4. Reconstruct the journal entry for cash paid for operating expenses, incorporating the change in the related balance sheet account(s), if any

5. Reconstruct the journal entry for the sale of equipment at a gain, incorporating the change in the related balance sheet account(s), if any.

6. Reconstruct the journal entry for income taxes expense, incorporating the change in the related balance sheet account(s), if any.

7. Reconstruct the entry to record the retirement of the $32,000 note payable at its $32,000 carrying (book) value in exchange for cash.

8. Reconstruct the entry for the purchase of new equipment.

9. Reconstruct the entry for the issuance of common stock.

10. Close all revenue and gain accounts to income summary.

11. Close all revenue and gain accounts to income summary.

12. Close Income Summary to Retained Earnings.

13. Reconstruct the journal entry for cash dividends paid.

Prepare the Statement of Cash flows for the year ended June 30, 2019 using the Direct Method. Hint Use the Cash T- account on the General Ledger tab to identify the sources and uses of cash. List cash outflows as negative values. Requirement General Journal General Ledger Trial Balance Direct Method Indirect Method 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. Unadjusted SMITH INCORPORATED Statement of Cash Flows (Direct Method) For Year Ended June 30, 2019 Cash flows from operating activities Unadjusted SMITH INCORPORATED Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2019 Cash flows from operating activities: Adjustments to reconcile net income to net cash provided by operating activities: Income statement items not affecting cash Cash flows from investing activities Changes in current operating assets and liabilities Cash flows from financing activities (Trial Balance Indirect Method >