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Required information [The foiiowing information appiies to the questions dispiayed below] The following financial statements and additional information are reported. IKIBAN INC. comparative Balance Sheets June 33, 2317 and 2313 231? 2316 Assets Cash 3 37,533 $ 44,333 Accounts receivable, net 85,030 51,030 Inventory 53,333 33,533 Prepaid expenses 4,430 5,430 Total current assets 220,730 186, 930 Equipment 124, 333 115,333 Accum. depreciationEquipment {27,030} (3,030) Total assets $31?,?30 $292,930 Liabilities and Equity Accounts payable $ 25,030 $ 30,030 Wages payable 3,030 15,030 Income taxes payable 3,430 3,830 Total current liabilities 34,430 43,830 Notes payable {long term} 30,030 80,030 Total liabilities 64,430 133, 830 Equity Common stock, $5 par value 220,030 180,030 Retained earnings 33,330 24,130 Total liabilities and equity $31?,730 $292,930 IKIBAN INC. Income statement Per Year Ended June 33, 2817 Sales $673,030 Cost of goods sold 411,030 Gross profit 237,030 Operating expenses Depreciation expense $53,630 other expenses 67,030 Total operating expenses 125,630 141,430 other gains (losses) Gain on sale of equipment 2,030 Income before taxes 143,430 Income taxes expense 43,390 Net income $ 99,510 Additional Information I. 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 $57,600 cash. d. Received cash for the sale of equipment that had cost $48,600, yielding a $2,000 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 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.) Answer is not complete. Cash flows from operating activities Net income Adjustments to reconcile net income to net cash provided by operating activities Income statement items not aecting cash Decrease in income taxes payable Depreciation expense 0 EBDD a Gain on sale of plant assets 0 {2,000} 0 Increase in accounts payable 0 (14,000} 9 Changes in current operating assets and liabilities Decrease in inventory 0 22,?06- 0 Decrease in prepaid expenses 0 1,000 o Decrease in accounts payable 0 (5,000) o Decrease in 1vvages payable 0 {9,000} o 9 9 Cash paid for operating expenses $ 151,410 Cash flows from investing activities Cash received irom sale of equipment a 10,000 a Cash paid for equipment a (51500} a (47,600) Cash flows from financing activities Cash received from stock issuance 60,000 Cash paid to retire notes (30,000) Cash paid for dividends (90,310) (60,310) Net increase (decrease) in cash $ 43,500 Cash balance at prior year-end Cash balance at current year-end $ 43,500
