Exercise 12-12 (Algo) 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 INCORPORATED
Comparative Balance Sheets
At June 30	2021	2020
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
Accumulated 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 INCORPORATED
Income Statement
For Year Ended June 30, 2021
Sales	$ 688,000
Cost of goods sold	413,000
Gross profit	275,000
Operating expenses (excluding depreciation)	69,000
Depreciation expense	60,600
	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

A $30,000 notes payable is retired at its $30,000 carrying (book) value in exchange for cash.

The only changes affecting retained earnings are net income and cash dividends paid.

New equipment is acquired for $59,600 cash.

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

Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement.

All purchases and sales of inventory are on credit.

Exercise 12-12 (Algo) Part 1

Required:

Prepare a statement of cash flows using the indirect method for the year ended June 30, 2021. (Amounts to be deducted should be indicated with a minus sign.)

Compute the companys cash flow on total assets ratio for its fiscal year 2021.