IKIBAN INC. Income Statement For Year Ended June 30, 2017 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $79,600 Other expenses 88,000 Total operating expenses $783,000 432,000 351,000 167,600 183,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 4,100 187,500 45,990 $141,510 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 $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 Other Expenses on the income statement. f. All purchases and sales of inventory are on credit. 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 Net income $ 199,710 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 $ 199,710 Cash flows from investing activities 0 Cash flows from financing activities 0 $ 199,710 Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end $ 199,710 Required information 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. 2016 IKIBAN INC. Comparative Balance Sheets June 30, 2017 and 2016 2017 Assets Cash $ 94,900 Accounts receivable, net 96,500 Inventory 84,800 Prepaid expenses 6,500 Total current assets 282,700 Equipment 145,000 Accum. depreciation-Equipment (37,500) Total assets $390, 200 Liabilities and Equity Accounts payable $ 46,000 Wages payable 8,100 Income taxes payable 5,500 Total current liabilities 59,600 Notes payable (long term) 51,000 Total liabilities 110,600 Equity Common stock, $5 par value 262,000 Retained earnings 17,600 Total liabilities and equity $390,200 $ 65,000 72,000 118,000 9,600 264,600 136,000 (19,500) $381, 100 $ 61,500 19,200 8,000 88,700 81,000 169, 700 181,000 30,400 $381,100