1.

Alvez reports net income of $310,000 for the year ended December 31. It also reports $96,300 depreciation expense and a $10,300 loss on the sale of equipment. Its comparative balance sheet reveals a $41,400 increase in accounts receivable, a $10,500 decrease in prepaid expenses, a $15,700 increase in accounts payable, a $12,900 decrease in wages payable, a $77,200 increase in equipment, and a $103,000 decrease in notes payable. Calculate the net increase in cash for the year.

$218,600.

$311,300.

$388,500.

$208,300.

$285,500.

2.

The following financial statements and additional information are reported.

IKIBAN INC. Comparative Balance Sheets June 30, 2015 and 2014
	2015				2014
Assets
Cash	$	106,600			$	62,300
Accounts receivable, net		69,100				51,600
Inventory		66,300				96,300
Prepaid expenses		4,800				5,800
Total current assets		246,800				216,000
Equipment		122,800				113,000
Accum. depreciationEquipment		(28,200	)			(10,600	)
Total assets	$	341,400			$	318,400
Liabilities and Equity
Accounts payable	$	26,300			$	32,400
Wages payable		7,500				16,700
Income taxes payable		2,100				4,200
Total current liabilities		35,900				53,300
Notes payable (long term)		50,000				76,000
Total liabilities		85,900				129,300
Equity
Common stock, $5 par value		230,000				181,000
Retained earnings		25,500				8,100
Total liabilities and equity	$	341,400			$	318,400

IKIBAN INC. Income Statement For Year Ended June 30, 2015
Sales				$	678,000
Cost of goods sold					407,000
Gross profit					271,000
Operating expenses
Depreciation expense	$	57,800
Other expenses		66,100
Total operating expenses					123,900
					147,100
Other gains (losses)
Gain on sale of equipment					2,800
Income before taxes					149,900
Income taxes expense					59,960
Net income				$	89,940

Additional Information

a.	A $26,000 note payable is retired at its $26,000 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 $58,600 cash.
d.	Received cash for the sale of equipment that had cost $48,800, yielding a $2,800 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.

Required:
(1)	Prepare a statement of cash flows for the year ended June 30, 2015, using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)
	Cash flows from operating activities Net income Adjustment to reconcile net income income statement Changes in current operating assets and liabilites cash flows from investing activities cash flows from financing activites Net increase (decrease) in cash cash balanace at prior year-end cash balance at current year-end