Use the following financial statements and additional information.

SANCHEZ INC. Comparative Balance Sheets June 30, 2017 and 2016
	2017				2016
Assets
Cash	$	101,300			$	48,900
Accounts receivable, net		68,000				53,000
Inventory		69,000				96,000
Prepaid expenses		5,700				7,100
Total current assets		244,000				205,000
Equipment		179,000				166,000
Accum. depreciationEquipment		(45,000	)			(15,000	)
Total assets	$	378,000			$	356,000
Liabilities and Equity
Accounts payable	$	33,000			$	40,000
Wages payable		7,000				17,000
Income taxes payable		3,600				4,000
Total current liabilities		43,600				61,000
Notes payable (long term)		43,000				85,000
Total liabilities		86,600				146,000
Equity
Common stock, $5 par value		250,000				180,000
Retained earnings		41,400				30,000
Total liabilities and equity	$	378,000			$	356,000

SANCHEZ INC. Income Statement For Year Ended June 30, 2017
Sales				$	940,000
Cost of goods sold					575,000
Gross profit					365,000
Operating expenses
Depreciation expense	$	77,000
Other expenses		93,000
Total operating expenses					170,000
					195,000
Other gains (losses)
Gain on sale of equipment					5,200
Income before taxes					200,200
Income taxes expense					61,280
Net income				$	138,920

Additional Information

a. A $43,000 note payable is retired at its $43,000 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 $75,000 cash.

d. Received cash for the sale of equipment that had cost $62,000, yielding a $5,200 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.

Make a 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 $43,000 note payable at its $43,000 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.