Exercise 12-17B Direct: Preparing statement of cash flows LO P5 The following financial statements and additional information are reported. 2018 IKIBAN INC. Comparative Balance Sheets June 30, 2019 and 2018 2019 Assets Cash $ 82,100 Accounts receivable, net 78,500 Inventory 72,800 Prepaid expenses 5,300 Total current assets 238,700 Equipment 133,000 Accum. depreciation-Equipment (31,500) Total assets $340,200 Liabilities and Equity Accounts payable $ 34,000 Wages payable 6,900 Income taxes payable 4,300 Total current liabilities 45,200 Notes payable (long term) 31,800 Total liabilities 77,000 Equity Common stock, $5 par value 238,000 Retained earnings 25,200 Total liabilities and equity $340,200 $ 53,000 60,000 100,000 7,200 220,200 124,000 (13,500) $330,700 $ 43,500 16,800 5,600 65,900 69,000 134,900 OVU 169,000 26,800 $330,700 IKIBAN INC. Income Statement For Year Ended June 30, 2019 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $67,600 Other expenses 76,000 Total operating expenses $723,000 420,000 303,000 143,600 159,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 2,900 162,300 44,790 $117,510 Additional Information a. A $37,200 note payable is retired at its $37,200 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 $66,600 cash. d. Received cash for the sale of equipment that had cost $57,600, yielding a $2,900 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. Using the direct method, prepare the statement of cash flows for the year ended June 30, 2019. (Amounts to be deducted should be indicated with a minus sign.) IKIBAN, INC. Statement of Cash Flows (Direct Method) For Year Ended June 30, 2019 Cash flows from operating activities Cash received from customers $ 303,000 Cash paid for inventory (18,500) Cash paid for operating expenses 27,200 Cash paid for income taxes Net cash provided by operating activities $ 311,700 Cash flows from investing activities I Cash paid for equipment Cash received from sale of equipment (66,600) 10,900 (55,700) Net cash used in investing activities Cash flows from financing activities Cash received from stock issuance Cash paid to retire notes Cash paid for dividends 69,000 (30,000) (126,310) $ Net cash used in financing activities Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end (87,310) 168,690 53,000 221,690 $