GL1201 (Algo) - Based on Exercise 12-11 LO P2, P3, A1 Use the following financial statements and additional information. ECO BUILD INCORPORATED Comparative Balance Sheets June 30, 2019 and 2018 2019 2018 $ 113,700 70,000 71,000 $ 75,000 55,000 98,000 4,800 6,000 259,500 144,000 (36,000) $ 367,500 234,000 133,000 (12,000) $ 355,000 Assets Cash 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 $ 34,000 6,000 4,500 44,500 45,000 89,500 $ 42,000 16,000 5,000 63,000 90,000 153,000 220,000 58,000 $ 367,500 160,000 42,000 $ 355,000 $ 757,000 463,000 294,000 ECO BUILD INCORPORATED Income Statement For Year Ended June 30, 2019 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $ 65,000 Other expenses 73,000 Total operating expenses Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income $ 138,000 156,000 2,700 158,700 48,580 $ 110,120 Additional Information a. A $45,000 note payable is retired at its $45,000 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 $64,000 cash. d. Received cash for the sale of equipment that had cost $53,000, yielding a $2,700 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, red the summarized activity of the current fiscal year. Upon completion, the trial balance tab should agree 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. Account Title Debit Credit Date June 30 Record entry Clear entry View general journal EX 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. Note = journal entry has been entered x 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 $45,000 note payable at its $45,000 carrying (book) value in exchange for cash. 8 Reconstruct the entry for the purchase of new equipment. Note : = journal entry has been entered Record entry Clear entry X: X $45,000 note payable at its $45,000 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 sum 11 Close all expense accounts to income summary. 12 Close Income Summary to Retained Earnings. 13 Reconstruct the journal entry for cash dividends paid. Note : = journal entry has been entered Prepare the Statement of Cash flows for the year ended June 30, 2019 using the Direct Method. Hint Use the Cash account on the General Ledger tab to identify the sources and uses of cash. List cash outflows as negative values. Unadjusted ECO BUILD 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: Requirement General Journal General Ledger Trial Balance Direct Method Indirect 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 ECO BUILD INCORPORATED Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2019 Cash flows from operating activities: 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