a. Equipment with a book value of $82,500 and an original cost of $162,000 was sold at a loss of $33,000. b. Paid $103,000 cash for a new truck c. Sold land costing $315,000 for $415,000 cash. yielding a gain of $100,000 d. Long-term investments in stock were sold for $94,900 cash, yielding a gain of $14.750. 35 Use the above information to determine cash flows from investing activities. (Amounts to be deducted should be indicated with minus sign.) Statement of Cash Flows (partial) Cash flows from investing activities 5 $ 0 2020 2019 $ 97,900 89,000 79, 800 6,000 272,700 140,000 (35,000) $377,700 $ 60,000 67,000 110,500 8,600 246,100 131,000 (17,000) $360, 100 At June 30 Assets Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accum. 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 $ 41,000 7,600 5,000 53,600 46,000 99,600 $ 54,000 18,200 7,000 79,200 76,000 155,200 252,000 26, 100 $377, 700 176,000 28,900 $360,100 IKIBAN INC. Income Statement For Year Ended June 30, 2020 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income $ 758,000 427,000 331,000 83,000 74,600 173,400 3,600 177,000 45,490 $ 131,510 Additional Information a. A $30,000 note payable is retired at its $30,000 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 $73,600 cash. d. Received cash for the sale of equipment that had cost $64,600. yielding a $3,600 gain. e. Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement f. All purchases and sales of inventory are on credit. IKIBAN, INC. 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 $ 0 Cash flows from investing activities $ 0 Cash flows from investing activities Cash flows from financing activities 0 $ 0 Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end $ 0 oneets 2020 2019 $ 97,900 89,000 79, 800 6,000 272,700 140,000 (35,000) $377,700 $ 60,000 67,000 110,500 8,600 246,100 131,000 (17,000) $360,100 At June 30 Assets Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accum. 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 $ 41,000 7,600 5,000 53,600 46,000 99,600 $ 54,000 18,200 7,000 79,200 76,000 155,200 252,000 26,100 $377,700 176,000 28,900 $360,100 IKIBAN INC. Income Statement For Year Ended June 30, 2020 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income $ 758,000 427,000 331,000 83,000 74,600 173,400 3,600 177,000 45,490 $ 131,510 Additional Information a. A $30,000 note payable is retired at its $30,000 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 $73,600 cash. d. Received cash for the sale of equipment that had cost $64,600, yielding a $3,600 gain. e. Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement. f. All purchases and sales of inventory are on credit. Exercise 12-12 (Algo) Part 2 (2) Compute the company's cash flow on total assets ratio for its fiscal year 2020. Choose Numerator: Operating cash flows Cash Flow on Total Assets Ratio Choose Denominator: Cash Flow on Total Assets Ratio 1 Average total assets Cash flow on total assets ratio 1 0 $662,500 301,000 361,500 Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) $148,400 Depreciation expense 36,750 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income 185, 150 (21,125) 155, 225 46,650 $108,575 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 73,900 89,930 299,656 1,370 464,856 141,500 (44,625) $561,731 $ 89,500 66,625 267,800 2,215 426, 140 124,000 (54,000) $496,140 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities Long-term notes payable Total liabilities Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity $ 69,141 14,800 83,941 57,000 140,941 $138,675 9,200 147,875 64,750 212,625 166,250 186,750 61,500 172,540 $561, 731 117,265 $496,140 a. The loss on the cash sale of equipment was $21,125 (details in b). b. Sold equipment costing $94,875, with accumulated depreciation of $46,125, for $27,625 cash. c. Purchased equipment costing $112,375 by paying $62,000 cash and signing a long-term note payable for the balance. d. Borrowed $5,600 cash by signing a short-term note payable. e. Paid $58,125 cash to reduce the long-term notes payable. f. Issued 4,100 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $53,300. Problem 12-3A (Algo) Indirect: Statement of cash flows LO A1, P2, P3 Required: 1. Prepare a complete statement of cash flows using the Indirect method for the current year. (Amounts to be deducted should be indicated with a minus sign.) FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating activities Net Income Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash Loss on disposal of equipment Depreciation expense Changes in current assets and current liabilities Changes in current assets and current liabilities $ $ Cash flows from investing activities Cash flows from financing activities: $ 0 Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year $ 0 Current Year Prior Year $ 175,000 99,500 617,500 892,000 364,600 (163,500) $1,093, 100 $ 119, 100 82,000 537,000 738,100 310,000 (109,500) $ 938,600 Assets Cash Accounts receivable Inventory Total current assets Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Accounts payable Income taxes payable Total current liabilities Equity Common ock, $2 par value Paid-in capital in excess of par value, common stock Retained earnings Total liabilities and equity $ 109,000 39,000 148,000 $ 82,000 30,600 112,600 605,200 215,800 124, 100 $1,093, 100 579,000 176,500 70,500 $ 938,600 GOLDEN CORPORATION Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Income before taxes Income taxes expense Net income $1,847,000 1,097,000 750,000 505,000 54,000 191,000 37,400 $ 153,600 Additional Information on Current Year Transactions a. Purchased equipment for $54,600 cash. b. Issued 13,100 shares of common stock for $5 cash per share. c. Declared and paid $100,000 in cash dividends. Required: Prepare a complete statement of cash flows using the indirect method for the current year. (Amounts to be deducted should be indicated with a minus sign.) GOLDEN CORPORATION Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash Changes in current assets and current liabilities $ 0 Cash flows from investing activities 0 Cash flows from financing activities: $ Cash flows from investing activities 0 Cash flows from financing activities: 0 $ 0 Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year $ 0