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

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The following financial statements and additional information are reported.

IKIBAN INC. Comparative Balance Sheets June 30, 2017 and 2016
	2017				2016
Assets
Cash	$	99,700			$	57,000
Accounts receivable, net		84,500				64,000
Inventory		76,800				106,000
Prepaid expenses		5,700				8,000
Total current assets		266,700				235,000
Equipment		137,000				128,000
Accum. depreciationEquipment		(33,500	)			(15,500	)
Total assets	$	370,200			$	347,500
Liabilities and Equity
Accounts payable	$	38,000			$	49,500
Wages payable		7,300				17,600
Income taxes payable		4,700				6,400
Total current liabilities		50,000				73,500
Notes payable (long term)		43,000				73,000
Total liabilities		93,000				146,500
Equity
Common stock, $5 par value		246,000				173,000
Retained earnings		31,200				28,000
Total liabilities and equity	$	370,200			$	347,500

IKIBAN INC. Income Statement For Year Ended June 30, 2017
Sales				$	743,000
Cost of goods sold					424,000
Gross profit					319,000
Operating expenses
Depreciation expense	$	71,600
Other expenses		80,000
Total operating expenses					151,600
					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

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 $70,600 cash.
4. Received cash for the sale of equipment that had cost $61,600, yielding a $3,300 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 12-12B Direct: Preparing statement of cash flows LO P1, P3, P5

Using the direct method, prepare the statement of cash flows for the year ended June 30, 2017. (Amounts to be deducted should be indicated with a minus sign.)