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 $ 99,700 84,500 76,800 5,700 $ 57,000 64,000 106,000 8,000 Cash Accounts receivable, net Inventory Prepaid expenses Total current assets 266,700 137,000 (33,500) 235,000 Equipment Accum. depreciation-Equipment 128,000 (15,500) $370,200 $347,500 Total assets Liabilities and Equity Accounts payable Wages payable Income taxes payable $38,000 7,300 4,700 50,000 43,000 $49,500 17,600 6,400 Total current liabilities 73,500 73,000 Notes payable (long term) Total liabilities 93,000 146,500 Equity Common stock, $5 par value Retained earnings 173,000 28,000 246,000 31,200 Total liabilities and equity $370,200 $347,500 IKIBAN INC Income Statement For Year Ended June 30, 2017 $743,000 424,000 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense Other expenses 319,000 $71,600 80,000 80,000 Other expenses Total operating expenses 151,600 167,400 Other gains (losses Gain on sale of equipment 3,300 Income before taxes 170,700 45,190 Income taxes expense $125,510 Net income Additional Information a. A $30,000 note payable is retired at its $30,000 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 $70,600 cash d. Received cash for the sale of equipment that had cost $61,600, yielding a $3,300 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. 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.) IKIBAN, INC. Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2017 Cash flows from operating activities Adiustments to reconcile net income to net cash provided by operating activities 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