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

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[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, 2019 and 2018
	2019				2018
Assets
Cash	$	103,900			$	50,000
Accounts receivable, net		74,000				57,000
Inventory		69,800				95,500
Prepaid expenses		5,000				6,600
Total current assets		252,700				209,100
Equipment		130,000				121,000
Accum. depreciationEquipment		(30,000	)			(12,000	)
Total assets	$	352,700			$	318,100
Liabilities and Equity
Accounts payable	$	31,000			$	39,000
Wages payable		6,600				16,200
Income taxes payable		4,000				5,000
Total current liabilities		41,600				60,200
Notes payable (long term)		36,000				66,000
Total liabilities		77,600				126,200
Equity
Common stock, $5 par value		232,000				166,000
Retained earnings		43,100				25,900
Total liabilities and equity	$	352,700			$	318,100

IKIBAN INC. Income Statement For Year Ended June 30, 2019
Sales				$	708,000
Cost of goods sold					417,000
Gross profit					291,000
Operating expenses
Depreciation expense	$	64,600
Other expenses		73,000
Total operating expenses					137,600
					153,400
Other gains (losses)
Gain on sale of equipment					2,600
Income before taxes					156,000
Income taxes expense					44,490
Net income				$	111,510

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 $63,600 cash.
4. Received cash for the sale of equipment that had cost $54,600, yielding a $2,600 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.

Prepare a statement of cash flows using the indirect method for the year ended June 30, 2019. (Amounts to be deducted should be indicated with a minus sign.)