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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

  1. A $30,000 note payable is retired at its $30,000 carrying (book) value in exchange for cash.
  2. The only changes affecting retained earnings are net income and cash dividends paid.
  3. New equipment is acquired for $59,600 cash.
  4. Received cash for the sale of equipment that had cost $50,600, yielding a $2,200 gain.
  5. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.
  6. 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.

IKIBAN, INC.
Statement of Cash Flows (Indirect Method)
For Year Ended June 30, 2017
Cash flows from operating activities
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
$0
Cash flows from investing activities
0
Cash flows from financing activities
0
Net increase (decrease) in cash $0
Cash balance at prior year-end
Cash balance at current year-end

Cash Flow on Total Assets Ratio
Choose Numerator: / Choose Denominator: = Cash Flow on Total Assets Ratio
/ = Cash flow on total assets ratio
/ = 0

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