Use the following financial statements and additional information. Assets Cash MARCELLUS INCORPORATED Comparative Balance Sheets June...

 

Transcribed Image Text:

Use the following financial statements and additional information. Assets Cash MARCELLUS INCORPORATED Comparative Balance Sheets June 30, 2021 and 2020 2021 Accounts receivable, net 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 Sales Cost of goods sold 2020 $ 62,300 78,000 $ 11,300 61,000 66,000 92,000 6,000 7,500 212,300 171,800 192,000 (48,000) $ 356,300 $ 30,000 6,000 178,000 (16,000) $ 333,800 $ 36,000 16,000 4,300 4,800 40,300 56,800 38,000 75,000 78,300 131,800 220,000 160,000 58,000 $ 356,300 42,000 $ 333,800 MARCELLUS INCORPORATED Income Statement For Year Ended June 30, 2021 $ 1,018,000 623,000 395,000 Gross profit Operating expenses Depreciation expense $ 85.000 Sales Cost of goods sold Gross profit Operating expenses MARCELLUS INCORPORATED Income Statement For Year Ended June 30, 2021 Depreciation expense Other expenses Total operating expenses Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income $ 85,000 101,000 $ 1,018,000 623,000 395,000 $ 186,000 209,000 6,500 215,500 65,960 $ 149,540 Additional Information a. A $37,000 note payable is retired at its $37,000 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 $83,000 cash. d. Received cash for the sale of equipment that had cost $69,000, yielding a $6,500 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, 2020 and June 30, 2021. Direct Method tab - Prepare the Statement of Cash flows for the year ended June 30, 2021 using the direct method. Indirect Method tab - Prepare the reconciliation to the indirect method. 1,001,000 Credit View transaction list View journal entry worksheet No Date Account Title Debit 1 June 30 Cash Accounts receivable, net Sales 2 June 30 Cost of goods sold Accounts payable Inventory Cash 17,000 1,018,000 623,000 6,000 26,000 603,000 3 June 30 Depreciation expense 85,000 Accumulated depreciation - Equipment 85,000 4 June 30 Other expenses 101,000 Wages payable 10,000 Prepaid expenses 1,500 Cash 109,500 5 June 30 Cash Accumulated depreciation - Equipment Gain on sale of equipment Equipment 22,500 53,000 6,500 69,000 < Prev 3 of 7 Next > 5 June 30 Cash 22,500 Accumulated depreciation - Equipment 53,000 Gain on sale of equipment 6,500 Equipment 69,000 6 June 30 Income taxes expense Income taxes payable Cash 65,960 500 66,460 + 7 June 30 Notes payable (long-term) 37,000 Cash 37,000 8 June 30 Equipment Cash 83,000 83,000 9 June 30 Cash 60,000 Common stock, $5 par value 60,000 110 10 June 30 Sales 1,018,000 Gain on sale of equipment 6,500 Income summary 1,024,500 11 June 30 Income summary Cost of goods sold Depreciation expense 874,960 623,000 85,000 7 June 30 Notes payable (long-term) Cash 37,000 37,000 8 June 30 Equipment Cash 83,000 83,000 9 June 30 Cash 60,000 Common stock, $5 par value 60,000 110 June 30 Sales Gain on sale of equipment 1,018,000 6,500 Income summary 1,024,500 11 June 30 Income summary Cost of goods sold Depreciation expense Other expenses Income taxes expense 12 June 30 Income summary Retained earnings 13 June 30 Retained earnings Cash < Requirement General Ledger > 874,960 623,000 85,000 101,000 65,960 149,540 149,540 133,540 133,540 MARCELLUS INCORPORATED Statement of Cash Flows (Direct Method) For Year Ended June 30, 2021 Cash flows from operating activities: Cash flows from investing activities: Cash flows from financing activities: Post-closing Cash flows from operating activities: Net income MARCELLUS INCORPORATED Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2021 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 < Direct Method Indirect Method > $ 149,540 Use the following financial statements and additional information. Assets Cash MARCELLUS INCORPORATED Comparative Balance Sheets June 30, 2021 and 2020 2021 Accounts receivable, net 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 Sales Cost of goods sold 2020 $ 62,300 78,000 $ 11,300 61,000 66,000 92,000 6,000 7,500 212,300 171,800 192,000 (48,000) $ 356,300 $ 30,000 6,000 178,000 (16,000) $ 333,800 $ 36,000 16,000 4,300 4,800 40,300 56,800 38,000 75,000 78,300 131,800 220,000 160,000 58,000 $ 356,300 42,000 $ 333,800 MARCELLUS INCORPORATED Income Statement For Year Ended June 30, 2021 $ 1,018,000 623,000 395,000 Gross profit Operating expenses Depreciation expense $ 85.000 Sales Cost of goods sold Gross profit Operating expenses MARCELLUS INCORPORATED Income Statement For Year Ended June 30, 2021 Depreciation expense Other expenses Total operating expenses Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income $ 85,000 101,000 $ 1,018,000 623,000 395,000 $ 186,000 209,000 6,500 215,500 65,960 $ 149,540 Additional Information a. A $37,000 note payable is retired at its $37,000 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 $83,000 cash. d. Received cash for the sale of equipment that had cost $69,000, yielding a $6,500 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, 2020 and June 30, 2021. Direct Method tab - Prepare the Statement of Cash flows for the year ended June 30, 2021 using the direct method. Indirect Method tab - Prepare the reconciliation to the indirect method. 1,001,000 Credit View transaction list View journal entry worksheet No Date Account Title Debit 1 June 30 Cash Accounts receivable, net Sales 2 June 30 Cost of goods sold Accounts payable Inventory Cash 17,000 1,018,000 623,000 6,000 26,000 603,000 3 June 30 Depreciation expense 85,000 Accumulated depreciation - Equipment 85,000 4 June 30 Other expenses 101,000 Wages payable 10,000 Prepaid expenses 1,500 Cash 109,500 5 June 30 Cash Accumulated depreciation - Equipment Gain on sale of equipment Equipment 22,500 53,000 6,500 69,000 < Prev 3 of 7 Next > 5 June 30 Cash 22,500 Accumulated depreciation - Equipment 53,000 Gain on sale of equipment 6,500 Equipment 69,000 6 June 30 Income taxes expense Income taxes payable Cash 65,960 500 66,460 + 7 June 30 Notes payable (long-term) 37,000 Cash 37,000 8 June 30 Equipment Cash 83,000 83,000 9 June 30 Cash 60,000 Common stock, $5 par value 60,000 110 10 June 30 Sales 1,018,000 Gain on sale of equipment 6,500 Income summary 1,024,500 11 June 30 Income summary Cost of goods sold Depreciation expense 874,960 623,000 85,000 7 June 30 Notes payable (long-term) Cash 37,000 37,000 8 June 30 Equipment Cash 83,000 83,000 9 June 30 Cash 60,000 Common stock, $5 par value 60,000 110 June 30 Sales Gain on sale of equipment 1,018,000 6,500 Income summary 1,024,500 11 June 30 Income summary Cost of goods sold Depreciation expense Other expenses Income taxes expense 12 June 30 Income summary Retained earnings 13 June 30 Retained earnings Cash < Requirement General Ledger > 874,960 623,000 85,000 101,000 65,960 149,540 149,540 133,540 133,540 MARCELLUS INCORPORATED Statement of Cash Flows (Direct Method) For Year Ended June 30, 2021 Cash flows from operating activities: Cash flows from investing activities: Cash flows from financing activities: Post-closing Cash flows from operating activities: Net income MARCELLUS INCORPORATED Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2021 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 < Direct Method Indirect Method > $ 149,540