Exercise 12-11 Indirect: Preparing statement of cash flows LO P1, P2, P3, A1

The following financial statements and additional information are reported.

IKIBAN INC. Comparative Balance Sheets June 30, 2017 and 2016
	2017				2016
Assets
Cash	$	102,700			$	52,000
Accounts receivable, net		77,000				59,000
Inventory		71,800				98,500
Prepaid expenses		5,200				7,000
Total current assets		256,700				216,500
Equipment		132,000				123,000
Accum. depreciationEquipment		(31,000	)			(13,000	)
Total assets	$	357,700			$	326,500
Liabilities and Equity
Accounts payable	$	33,000			$	42,000
Wages payable		6,800				16,600
Income taxes payable		4,200				5,400
Total current liabilities		44,000				64,000
Notes payable (long term)		38,000				68,000
Total liabilities		82,000				132,000
Equity
Common stock, $5 par value		236,000				168,000
Retained earnings		39,700				26,500
Total liabilities and equity	$	357,700			$	326,500

IKIBAN INC. Income Statement For Year Ended June 30, 2017
Sales				$	718,000
Cost of goods sold					419,000
Gross profit					299,000
Operating expenses
Depreciation expense	$	66,600
Other expenses		75,000
Total operating expenses					141,600
					157,400
Other gains (losses)
Gain on sale of equipment					2,800
Income before taxes					160,200
Income taxes expense					44,690
Net income				$	115,510

Additional Information

1. A $30,000 note payable is retired at its $30,000 carrying (book) value in exchange for cash.
2. The only changes affecting retained earnings are net income and cash dividends paid.
3. New equipment is acquired for $65,600 cash.
4. Received cash for the sale of equipment that had cost $56,600, yielding a $2,800 gain.
5. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.
6. All purchases and sales of inventory are on credit.

Exercise 12-11 Part 1

Required:

(1) Prepare a statement of cash flows for the year ended June 30, 2017, using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)