ONPOINT INCORPORATED
Comparative Balance Sheets
June 30, 2021 and 2020
	2021	2020
Assets
Cash	$ 127,700	$ 74,600
Accounts receivable, net	70,000	55,000
Inventory	65,000	90,000
Prepaid expenses	4,500	5,600
Total current assets	267,200	225,200
Equipment	131,000	121,000
Accumulated depreciationEquipment	(33,000)	(11,000)
Total assets	$ 365,200	$ 335,200
Liabilities and Equity
Accounts payable	$ 28,000	$ 34,000
Wages payable	7,000	17,000
Income taxes payable	3,800	4,200
Total current liabilities	38,800	55,200
Notes payable (long term)	35,000	70,000
Total liabilities	73,800	125,200
Equity
Common stock, $5 par value	250,000	180,000
Retained earnings	41,400	30,000
Total liabilities and equity	$ 365,200	$ 335,200

ONPOINT INCORPORATED
Income Statement
For Year Ended June 30, 2021
Sales		$ 699,000
Cost of goods sold		427,000
Gross profit		272,000
Operating expenses
Depreciation expense	$ 61,000
Other expenses	69,000
Total operating expenses		$ 130,000
		142,000
Other gains (losses)
Gain on sale of equipment		2,200
Income before taxes		144,200
Income taxes expense		44,140
Net income		$ 100,060

Additional Information

1. A $35,000 note payable is retired at its $35,000 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 $60,000 cash.
4. Received cash for the sale of equipment that had cost $50,000, yielding a $2,200 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.

Journal entry worksheet

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 $35,000 note payable at its $35,000 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 expense accounts to income summary.

12.

Close Income Summary to Retained Earnings.

13.

Reconstruct the journal entry for cash dividends paid.