Exercise 16-5 Indirect: Cash flows from operating activities LO P2 Fitz Company reports the following information. Selected Annual Income Statement Data Selected Year-End Balance Sheet Data Accounts receivable decrease Net income $385,000 Depreciation expense 48,200 Inventory decrease Amortization expense 8,600 Prepaid expenses increase Gain on sale of plant assets 6,400 Accounts payable decrease Salaries payable increase $35,400 46,500 6,100 10,100 1,300. Use the indirect method to prepare the operating activities section of its statement of cash flows for the year ended December 31. (Amounts to be deducted should be indicated with a minus sign.) Statement of Cash Flows (partial) Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operating activities $ 0 Required information Exercise 16-11 Indirect: Preparing statement of cash flows LO 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, 2019 and 2018 Assets Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accum. 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 2019 2018 $ 97,900 $ 60,000 89,000 67,000 79,800 110,500 6,000 8,600 272,700 246,100 140,000 131,000 (35,000) (17,000) $377,700 $360,100 $ 54,000 7,600 18,200 5,000 7,000 53,600 79,200 46,000 76,000 99,600 155,200 252,000 176,000 26,100 28,900 $377,700 $360,100 $ 41,000 IKIBAN INC. Income Statement For Year Ended June 30, 2019 Sales Cost of goods sold Gross profit Operating expenses $758,000 427,000 331,000 Equity Common stock, $5 par value Retained earnings Total liabilities and equity IKIRAN INC. Income Statement For Year Ended June 30, 2019 252,000 176,000 26,100 28,900 $377,700 $360,100 Sales $758,000 Cost of goods sold 427,000 Gross profit 331,000 Operating expenses Depreciation expense $74,600 Other expenses 83,000 Total operating expenses 157,600 173,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 3,600 177,000 45,490 $131,510 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 $73,600 cash. d. Received cash for the sale of equipment that had cost $64,600, yielding a $3,600 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 using the indirect method for the year ended June 30, 2019. (Amounts to be deducted should be indicated with a minus sign.) be indicated with a minus sign.) IKIBAN, INC. Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2019 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 0 0 Net increase (decrease) in cash $ 0 Cash balance at prior year-end Cash balance at current year-end $ 0 Exercise 16-16B Direct: Computing cash flows LO P5 Case X: Compute cash received from customers Sales $640,000 Case Y: Accounts receivable, Beginning balance. Accounts receivable, Ending balance Compute cash paid for rent 62,000 85,560 Rent expense $127,100 Rent payable, Beginning balance 13,250 Rent payable, Ending balance 11,660 Case : Compute cash paid for inventory Cost of goods sold $704,000 Inventory, Beginning balance 218,240 Accounts payable, Beginning balance 91,661 Inventory, Ending balance 178,957 Accounts payable, Ending balance 113,660 For each of the above three separate cases, use the information provided about the current-year operations of Sahim Company to compute the required cash flow information. Assume all purchases and sales of inventory are on credit Case X Cash received from customers Case Y: Case Z Cash paid for rent Cash paid for inventory m Solving Exercise 16-17B Direct: Preparing statement of cash flows LO P5 The following financial statements and additional information are reported. IKIBAN INC. Comparative Balance Sheets June 30, 2019 and 2018 Assets Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accum. 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 IKIBAN INC. Income Statement For Year Ended June 30, 2019 2019 2018 $ 81,500 $ 54,000 80,000 73,800 5,400 61,000 101,500 7,400 240,700 223,900 134,000 125,000 (32,000) (14,000) $342,700 $334,900 $ 35,000 $ 45,000 7,000 4,400 46,400 17,000 5,800 67,800 32,000 70,000 78,400 137,800 240,000 170,000 24,300 27,100 $342,700 $334,900 Sales $728,000 Cost of goods sold 421,000 Gross profit 307,000 Operating expenses Depreciation expense $68,600 Other expenses 77,000 Total operating expenses 145,600 161,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 3,000 164,400 44,890 $119,510 Additional Information a. A $38,000 note payable is retired at its $38,000 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 $67,600 cash. d. Received cash for the sale of equipment that had cost $58,600, yielding a $3,000 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. Using the direct method, prepare the statement of cash flows for the year ended June 30, 2019. (Amounts to be deducted should be indicated with a minus sign.) IKIBAN, INC. Statement of Cash Flows (Direct Method) For Year Ended June 30, 2019 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 $ 0 0 0 $ 0 $