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 $ 95,500 Accounts receivable, net 95,000 Inventory 83,800 Prepaid expenses 6,400 Total current assets 280, 700 Equipment 144,000 Accum. depreciation-Equipment (37,000) Total assets $387,700 Liabilities and Equity Accounts payable $ 45,000 Wages payable 8,000 Income taxes payable 5,400 Total current liabilities 58,400 Notes payable (long term) 50,000 Total liabilities 108,400 Equity Common stock, $5 par value 260,000 Retained earnings 19,300 Total liabilities and equity $387,700 $ 64,000 71,000 116,500 9,400 260,900 135,000 (19,000) $376,900 $ 60,000 19,000 7,800 86,800 80,000 166,800 180,000 30, 100 $376,900 $778,000 431,000 347,000 IKIBAN INC. Income Statement For Year Ended June 30, 2017 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $78,600 Other expenses 87,000 Total operating expenses Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 165,600 181,400 4,000 185,400 45, 890 $139,510 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 $77,600 cash. d. Received cash for the sale of equipment that had cost $68,600, yielding a $4,000 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. Exercise 12-11 Part 1 Required: (1) Prepare a statement of cash flows for the year ended June 30, 2017, using the indirect method (Amounts to be dedpeted 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 $ 139,510 Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Depreciation expense 68,600 Gain on sale of plant assets Changes in current operating assets and liabilities Changes in current operating assets and liabilities $ 208,110 Cash flows from investing activities 0 Cash flows from financing activities 0 -- -- HAN 0 Cash flows from financing activities 0 $ 208, 110 Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end $ 208, 110