Exercise 12-11 Indirect: Preparing statement of cash flows LO P2, P3, A1 [The following information applies to the questions displayed below.) The following financial statements and additional information are reported. 2018 IKIBAN INC. Comparative Balance Sheets June 30, 2019 and 2018 2019 Assets Cash $104,500 Accounts receivable, net 72,500 Inventory 68,800 Prepaid expenses 4,900 Total current assets 250, 700 Equipment 129,000 Accum. depreciation-Equipment (29,500) Total assets $350,200 Liabilities and Equity Accounts payable $ 30,000 Wages payable 6,500 Income taxes payable 3,900 Total current liabilities 40,400 Notes payable (long term) 35,000 Total liabilities 75,400 Equity Common stock, $5 par value 230,000 Retained earnings 44,800 Total liabilities and equity $350,200 $ 49,000 56,000 94,000 6,400 205,400 120,000 (11,500) $313,900 $ 37,500 16,000 4,800 58,300 65,000 123,300 165,000 25,600 $313,900 IKIBAN INC. Income Statement For Year Ended June 30, 2019 Total liabilities and equity $350,200 $313,900 IKIBAN INC. Income Statement For Year Ended June 30, 2019 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $63,600 Other expenses 72,000 Total operating expenses $703,000 416,000 287,000 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 135,600 151,400 2,500 153,900 44,390 $109,510 Additional Information a. A $30,000 note payable is retired at its $30,000 carrying (book) value in exchange for cash. b. The only changes affecting retained earnings are net income and cash dividends paid. c. New equipment is acquired for $62,600 cash. d. Received cash for the sale of equipment that had cost $53,600, yielding a $2,500 gain. e. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement. f. All purchases and sales of inventory are on credit. Required: 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.) KOBAN, INC Statement of Cash Flown (Indirect Method) For Year Ended June 30, 2010 Cash flows from operating activities Adjustments to reconcile net income to not cash provided by operating activities Income statement items not affecting cash Changes in current operating assets and liabilities Required information Hovnom POI GIS aru ALGO Cash flows from investing activities Cash flows from financing activities Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end
