please explain calculations how they get everything

andout5.pdf Handout 5 Mega keeps its accounting records on a cash basis during the year. At year end, it converts its books to the accrual basis for preparing its financial statements. At the end of 2018, Mega reported the following post-closing trial balance after converting it to the accrual basis. (Hint: These will also be the beginning balances for 2019.) Cash Accounts receivable Supplies Inventory Equipment Accumulated depreciation Accounts payable (for inventory) Salaries payable Income tax payable Common stock Retained earnings December 31, 2018 (accrual) Debit Credit $ 2,700 4,200 2,100 5,600 12,000 $ 4,800 6,100 500 2,000 7,000 6,200 At the end of 2019, you are asked to convert Mega's books from cash basis to accrual basis and prepare a balance sheet and income statement on an accrual basis. To do this, you are provided with the following information: You are provided with the following information as of December 31, 2019: Cash receipts from customers 67,300 Cash payments: To vendors (for inventory) To employees For prepaid supplies For other operating expenses (OE) To stockholders For the 2018 income tax liability that was paid on March 15, 2019 with tax returns 30.600 15,500 2,500 5,500 6.000 2,000 5.900 7.000 Other Information: Customers owed Mega Mega owed vendors (for inventory) Mega owed employees Physical count of inventory Physical count of supplies Income tax rate for 2019 900 6.300 1,000 25% Mega depreciates its equipment using the straight-line method over 10 years with no salvage value. Assume that the balance given for other operating expenses (OE) is the same for both cash and accrual Cash receipts from customers 67,300 Cash payments: To vendors (for inventory) To employees For prepaid supplies For other operating expenses (OE) To stockholders For the 2018 income tax liability that was paid on March 15, 2019 with tax returns 30,600 15,500 2,500 5,500 6,000 2,000 Other information: Customers owed Mega Mega owed vendors (for inventory) Mega owed employees Physical count of inventory Physical count of supplies Income tax rate for 2019 5,900 7,000 900 6,300 1,000 25% Mega depreciates its equipment using the straight-line method over 10 years with no salvage value. Assume that the balance given for other operating expenses (OE) is the same for both cash and accrual. Required: Using accrual basis accounting, prepare a 2019 income statement and a 2019 balance sheet. Net income $ 5,200 $9,000 Beginning Inventory Purchases Cost of Goods Available Ending Inventory Cost of Goods Sold $ 5,600 (31,500 $37,100 6,300 $30,800 Cash purchases Plus: A/P increase ase $31,900 $30,600 900 $31,500 Mega, Inc. Income Statement sol.pdf Mega, Inc. Income Statement For the year ended December 31, 2019 $69,000 $ 5,600 31,500 $37,100 6,300 30.800 $38,200 Sales Beginning inventory Purchases Cost of goods available for sale Less: Ending Inventory Cost of goods sold Gross profit Operating expenses: Salaries expense Supplies expense Depreciation expense Other operating expenses Total operating expenses Income before income taxes Income tax expense Net income $15,900 3,600 1,200 5,500 26,200 $12,000 3,000 $ 9.000 Mega, Inc. Balance Sheet December 31, 2019 Cash Accounts receivable Supplies Inventory Equipment Less: Accumulated depreciation Total assets $ 7,900 5,900 1,000 6,300 $12,000 6,000 6,000 $27/100 $ 7,000 Accounts payable Salaries payable Income tax payable Total liabilities 900 3,000 $10,900 Common stock Retained earnings Total stockholders' equity 7,000 9.200 $16,200 Total liabilities and stockholders' equity $27.100