Use the following financial statements and additional information. TWININGS INCORPORATED Comparative Balance Sheets Assets Cash Accounts receivable, net June 30, 2019 and 2018 2019 2018 $ 61,800 81,000 68,000 $ 10,400 63,000 94,000 6,100 7,600 175,000 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 TWININGS INCORPORATED Income Statement For Year Ended June 30, 2019 Sales Cost of goods sold 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 216,900 195,000 (48,000) $ 363,900 $ 31,000 7,000 181,000 (16,000) $ 340,000 $ 38,000 17,000 4,500 5,000 42,500 60,000 40,000 80,000 82,500 140,000 240,000 170,000 41,400 30,000 $ 363,900 $ 340,000 $ 87,000 103,000 $ 1,038,000 635,000 403,000 S 190,000 213,000 6,900 219,900 67,310 $ 152,590 Retained earnings Total liabilities and equity 41,400 $ 363,900 30,000 $ 340,000 TWININGS INCORPORATED Income Statement For Year Ended June 30, 2019 Sales $ 1,038,000 Cost of goods sold 635,000 403,000 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 $ 87,000 103,000 $ 190,000 213,000 6,900 219,900 67,310 $ 152,590 Additional Information a. A $40,000 note payable is retired at its $40,000 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 $85,000 cash. d. Received cash for the sale of equipment that had cost $71,000, yielding a $6,900 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 Trial Balance Direct Method Indirect Method General Journal tab- Reconstruct the entries to summarize the activity between June 30, 2018 and June 30, 2019. Direct Method tab - Prepare the Statement of Cash flows for the year ended June 30, 2019 using the direct method. Indirect Method tab - Prepare the reconciliation to the indirect method. Requirement General Journal General Ledger Trial Balance Direct Method Indirect Method Using the Income statement, the comparative balance sheet, and the additional information given above, reconstr the summarized activity of the current fiscal year. Upon completion, the trial balance tab should agree with balances. View transaction list Journal entry worksheet < 1 2 3 4 5 6 7 8 13 Reconstruct the journal entry for cash receipts from customers, incorporating the change in the related balance sheet account(s), if any. Note: Enter debits before credits. Date June 30 Account Title Debit Credit Record entry Clear entry View general journal Requirement General Ledger > neque R Journal Ledger MIS PIE Method 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. Unadjusted TWININGS 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: ces R Journal Ledger 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 Cash flows from operating activities: TWININGS 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