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

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

The following financial statements and additional information are reported.

IKIBAN INC. Comparative Balance Sheets June 30, 2017 and 2016
	2017				2016
Assets
Cash	$	106,300			$	46,000
Accounts receivable, net		68,000				53,000
Inventory		65,800				89,500
Prepaid expenses		4,600				5,800
Total current assets		244,700				194,300
Equipment		126,000				117,000
Accum. depreciationEquipment		(28,000	)			(10,000	)
Total assets	$	342,700			$	301,300
Liabilities and Equity
Accounts payable	$	27,000			$	33,000
Wages payable		6,200				15,400
Income taxes payable		3,600				4,200
Total current liabilities		36,800				52,600
Notes payable (long term)		32,000				62,000
Total liabilities		68,800				114,600
Equity
Common stock, $5 par value		224,000				162,000
Retained earnings		49,900				24,700
Total liabilities and equity	$	342,700			$	301,300

IKIBAN INC. Income Statement For Year Ended June 30, 2017
Sales				$	688,000
Cost of goods sold					413,000
Gross profit					275,000
Operating expenses
Depreciation expense	$	60,600
Other expenses		69,000
Total operating expenses					129,600
					145,400
Other gains (losses)
Gain on sale of equipment					2,200
Income before taxes					147,600
Income taxes expense					44,090
Net income				$	103,510

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 $59,600 cash.
4. Received cash for the sale of equipment that had cost $50,600, yielding a $2,200 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.

rev: 12_05_2017_QC_CS-111198

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.)