Exercise 12-12 (Algo) 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. IKIBAN INCORPORATED Comparative Balance Sheets At June 30 Assets Cash Accounts receivable, net 2021 2020 $103,900 74,000 $ 50,000 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 Accumulated depreciation-Equipment (30,000) (12,000) Total assets $352,700 $318,100 Liabilities and Equity Accounts payable $31,000 $ 39,000 Wages payable 6.600 Income taxes payable 4,000 Total current liabilities 41,600 16,200 5,000 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 Total liabilities and equity 43,100 $352,700 25,900 $318,100 Sales Cost of goods sold Gruss profit IKIDAN INCORPORATED Income Statement For Year Ended June 30, 2021 5 708,000 417,000 291,000 73.000 Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net Income Additional Information 64,600 153,400 2,600 156,000 5 111,510 a. A $30,000 notes payable is retired at its $30,000 carrying (book) value in exchange for cash. b. The only changes affecting retained earnings are not income and cash dividends paid. c. New equipment is acquired for $63,600 cash d. Received cash for the sale of equipment that had cost $54.600, yielding a $2,600 gain. e. Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement f. All purchases and sales of inventory are on credit Cash flows from operating activities IKIBAN, INCORPORATED Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2021 Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Changes in current operating assets and liabilities 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