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 $ 84,500 Accounts receivable, net 72,500 Inventory 68,800 Prepaid expenses 4,900 Total current assets 230,700 Equipment 129,000 Accum. depreciation-Equipment (29,500) Total assets $330,200 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) 31,000 Total liabilities 71,400 Equity Common stock, $5 par value 230,000 Retained earnings 28,800 Total liabilities and equity $330,200 $ 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 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $63,600 Other expenses 72,000 Total operating expenses $703,000 416,000 287,000 135,600 151,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 2,500 153,900 44,390 $109,510 Additional Information a. A $34,000 note payable is retired at its $34,000 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. 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 Cash paid for inventory Cash paid for operating expenses Cash paid for income taxes Net cash used in operating activities $ 0 Cash flows from investing activities Cash received from sale of equipment Cash paid for equipment 0 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 0 $ 0 Net cash used in financing activities Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end $ 0