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Exercise 16-11 Indirect: Preparing statement of cash flows LO P1, P2, P3, A1 [The following information applies to the questions displayed below.] The following financial
Exercise 16-11 Indirect: Preparing statement of cash flows LO P1, P2, P3, A1
[The following information applies to the questions displayed below.]
The following financial statements and additional information are reported.
IKIBAN INC. Comparative Balance Sheets June 30, 2017 and 2016 | ||||||||
2017 | 2016 | |||||||
Assets | ||||||||
Cash | $ | 86,300 | $ | 46,000 | ||||
Accounts receivable, net | 68,000 | 53,000 | ||||||
Inventory | 65,800 | 89,500 | ||||||
Prepaid expenses | 4,600 | 5,800 | ||||||
Total current assets | 224,700 | 194,300 | ||||||
Equipment | 126,000 | 117,000 | ||||||
Accum. depreciationEquipment | (28,000 | ) | (10,000 | ) | ||||
Total assets | $ | 322,700 | $ | 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 | 29,900 | 24,700 | ||||||
Total liabilities and equity | $ | 322,700 | $ | 301,300 | ||||
IKIBAN INC. Income Statement For Year Ended June 30, 2017 | ||||||
Sales | $ | 688,000 | ||||
Cost of goods sold | 413,000 | |||||
Gross profit | 275,000 | |||||
Operating expenses | ||||||
Depreciation expense | $ | 60,600 | ||||
Other expenses | 69,000 | |||||
Total operating expenses | 129,600 | |||||
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 note 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 Other Expenses on the income statement.
- All purchases and sales of inventory are on credit.
Exercise 16-11 Part 1
Required:
(1) Prepare a statement of cash flows for the year ended June 30, 2017, using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) (2) Compute the company's cash flow on total assets ratio for its fiscal year 2017.
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