Exercise 16-19B (Algo) Direct: Preparing statement of cash flows LO P5 The following financial statements and additional information are reported. IKIBAN INCORPORATED Comparative Balance Sheets 2021 2020 $ 74,900 96,500 $ 65,000 84,800 72,000 118,000 At June 30 Assets Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Wages payable Income taxes payable Total current liabilities Notes payable (long term) Total liabilities Equity Common stock, $5 par value Retained earnings Total liabilities and equity 6,500 262,700 145,000 (37,500) $370,200 $ 46,000 8,100 9,600 264,600 136,000 (19,500) $ 381,100 $ 61,500 19,200 8,000 5,500 59,600 88,700 34,200 81,000 93,800 169,700 262,000 14,400 181,000 30,400 $ 370,200 $ 381,100 Sales IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income $ 783,000 432,000 351,000 88,000 79,600 183,400 4,100 187,500 45,990 $141,510 Additional Information a. A $46,800 note payable is retired at its $46,800 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 $78,600 cash. d. Received cash for the sale of equipment that had cost $69,600, yielding a $4,100 gain. e. Prepaid Expenses and Wages Payable relate to Operating 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, 2021. (Amounts to be deducted should be indicated with a minus sign.) IKIBAN, INCORPORATED Statement of Cash Flows (Direct Method) For Year Ended June 30, 2021 Cash flows from operating activities 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