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Required information Exercise 12-11 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. 2016 IKIBAN INC. Comparative Balance Sheets June 30, 2017 and 2016 2017 Assets Cash $ 93,700 Accounts receivable, net 99,500 Inventory 86,800 Prepaid expenses 6,700 Total current assets 286,700 Equipment 147,000 Accum. depreciation-Equipment (38,500) Total assets $395,200 Liabilities and Equity Accounts payable $ 48,000 Wages payable 8,300 Income taxes payable 5,700 Total current liabilities 62,000 Notes payable (long term) 53,000 Total liabilities 115,000 Equity Common stock, $5 par value 266,000 Retained earnings 14,200 Total liabilities and equity $395,200 $ 67,000 74,000 121,000 10,000 272,000 138,000 (20,500) $389,500 $ 64,500 19,600 8, 400 92,500 83,000 175,500 183,000 31,000 $389,500 IKIBAN INC. Income Statement For Year Ended June 30, 2017 $793,000 434,000 359,000 IKIBAN INC. Income Statement For Year Ended June 30, 2017 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $81,600 Other expenses 90,000 Total operating expenses Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 171,600 187,400 4,300 191,700 46,190 $145,510 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 $80,600 cash. d. Received cash for the sale of equipment that had cost $71,600, yielding a $4,300 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 12-12B Direct: Preparing statement of cash flows LO P1, P3, P5 Required information IKIBAN, INC. Statement of Cash Flows (Direct Method) For Year Ended June 30, 2017 Cash flows from operating activities Cash paid for operating expenses Cash paid for inventory Cash paid for income taxes Cash received from customers > $ 0 Net cash provided by operating activities Cash flows from investing activities Cash received from sale of equipment Cash paid for equipment >> 12,300 (80,600) > (68,300) Net cash used in investing activities Cash flows from financing activities Cash paid to retire notes Cash paid for dividends Cash received from stock issuance (30,000) (162,310) 83,000 Net cash used in financing activities Net increase (decrease) in cash Cash balance at prior year-end (109,310) $ (177,610)
