Use the following financial statements and additional information. SACRAMENTO INC. Comparative Balance Sheets June 30, 2019 and 2018 Assets Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accum. 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 $100,800 $ 45,200 76,000 59,000 65,000 90,000 5,400 6,800 247,200 201,000 170,000 157,000 (42,000) (14,000) $375,200 $344,000 $ 28,000 $ 34,000 19,000 8,000 4,500 5,000 40,500 58,000 35,000 70,000 75,500 128,000 250,000 180,000 49,700 36,000 $375,200 $344,000 SACRAMENTO INC. Income Statement For Year Ended June 30, 2019 Sales $886,000 Cost of goods sold 542,000 Gross profit 344,000 Operating expenses Depreciation expense $73,000 Other expenses 87,000 Total operating expenses 160,000 184,000 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 4,300 188,300 57,640 $130,660 Additional Information a. A $35,000 note payable is retired at its $35,000 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 $72,000 cash. d. Received cash for the sale of equipment that had cost $59,000, yielding a $4,300 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. Post-closing SACRAMENTO INC. 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: