Exercise $12-12($Algo$)$ Indirect: Preparing statement of cash flows LO P$2,$ P$3,$ A$1$

Skip to question

$[$The following information applies to the questions displayed below.$]$

The following financial statements and additional information are reported.

IKIBAN INCORPORATED

Comparative Balance Sheets

At June $3020212020$

Assets

Cash $ $99,700$ $ $57,000$

Accounts receivable, net $84,50064,000$

Inventory $76,800106,000$

Prepaid expenses $5,7008,000$

Total current assets $266,700235,000$

Equipment $137,000128,000$

Accumulated depreciation$$Equipment $(33,500)(15,500)$

Total assets $ $370,200$ $ $347,500$

Liabilities and Equity

Accounts payable $ $38,000$ $ $49,500$

Wages payable $7,30017,600$

Income taxes payable $4,7006,400$

Total current liabilities $50,00073,500$

Notes payable $($long term$)43,00073,000$

Total liabilities $93,000146,500$

Equity

Common stock, $$5$ par value $246,000173,000$

Retained earnings $31,20028,000$

Total liabilities and equity $ $370,200$ $ $347,500$

IKIBAN INCORPORATED

Income Statement

For Year Ended June $30,2021$

Sales $ $743,000$

Cost of goods sold $424,000$

Gross profit $319,000$

Operating expenses $($excluding depreciation$)80,000$

Depreciation expense $71,600$

$167,400$

Other gains $($losses$)$

Gain on sale of equipment $3,300$

Income before taxes $170,700$

Income taxes expense $45,190$

Net income $ $125,510$

Additional Information

A $$30,000$ notes payable is retired at its $$30,000$ carrying $($book$)$ value in exchange for cash.

The only changes affecting retained earnings are net income and cash dividends paid.

New equipment is acquired for $$70,600$ cash.

Received cash for the sale of equipment that had cost $$61,600,$ yielding a $$3,300$ gain.

Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement.

All purchases and sales of inventory are on credit.

Exercise $12-12($Algo$)$ Part $1$

Required:

$(1)$ Prepare a statement of cash flows using the indirect method for the year ended June $30,2021.$

Note: Amounts to be deducted should be indicated with a minus sign.