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	$	93,700			$	67,000
Accounts receivable, net		99,500				74,000
Inventory		86,800				121,000
Prepaid expenses		6,700				10,000
Total current assets		286,700				272,000
Equipment		147,000				138,000
Accum. depreciationEquipment		(38,500	)			(20,500	)
Total assets	$	395,200			$	389,500
Liabilities and Equity
Accounts payable	$	48,000			$	64,500
Wages payable		8,300				19,600
Income taxes payable		5,700				8,400
Total current liabilities		62,000				92,500
Notes payable (long term)		53,000				83,000
Total liabilities		115,000				175,500
Equity
Common stock, $5 par value		266,000				183,000
Retained earnings		14,200				31,000
Total liabilities and equity	$	395,200			$	389,500

IKIBAN INC. Income Statement For Year Ended June 30, 2017
Sales				$	793,000
Cost of goods sold					434,000
Gross profit					359,000
Operating expenses
Depreciation expense	$	81,600
Other expenses		90,000
Total operating expenses					171,600
					187,400
Other gains (losses)
Gain on sale of equipment					4,300
Income before taxes					191,700
Income taxes expense					46,190
Net income				$	145,510

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 $80,600 cash.
4. Received cash for the sale of equipment that had cost $71,600, yielding a $4,300 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.
7. 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.)

8. 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
   Cash flows from investing activities
   Cash flows from financing activities
   Net increase (decrease) in cash
   Cash balance at prior year-end
   Cash balance at current year-end