Required information Exercise 12-12 (Algo) Indirect: Preparing statement of cash flows LO P2, P3, A1 [The...
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Required information Exercise 12-12 (Algo) 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 INCORPORATED Comparative Balance Sheets 2021 2020 $ 95,500 95,000 $ 64,000 83,800 71,000 116,500 At June 30 Assets Cash Accounts receivable, net Prepaid expenses Inventory Total current assets Equipment Accumulated 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 6,400 9,400 280,700 260,900 144,000 (37,000) $ 387,700. $ 45,000 8,000 135,000 (19,000) $ 376,900 $ 60,000 19,000 7,800 5,400 58,400 86,800 50,000 80,000 108,400 166,800 260,000 180,000 19,300 $ 387,700 30,100 $ 376,900 1 Sales Cost of goods sold Gross profit IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income $ 778,000 431,000 347,000 87,000 78,600 181,400 4,000 185,400 45,890 $ 139,510 Additional Information a. A $30,000 notes 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 Operating Expenses on the income statement. f. All purchases and sales of inventory are on credit. Exercise 12-12 (Algo) Part 1 Required: (1) Prepare a statement of cash flows using the indirect method for the year ended June 30, 2021. Note: Amounts to be deducted should be indicated with a minus sign. Cash flows from operating activities IKIBAN, INCORPORATED Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2021 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 + S 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 Required information Exercise 12-12 (Algo) 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 INCORPORATED Comparative Balance Sheets 2021 2020 $ 95,500 95,000 $ 64,000 83,800 71,000 116,500 At June 30 Assets Cash Accounts receivable, net Prepaid expenses Inventory Total current assets Equipment Accumulated 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 6,400 9,400 280,700 260,900 144,000 (37,000) $ 387,700. $ 45,000 8,000 135,000 (19,000) $ 376,900 $ 60,000 19,000 7,800 5,400 58,400 86,800 50,000 80,000 108,400 166,800 260,000 180,000 19,300 $ 387,700 30,100 $ 376,900 1 Sales Cost of goods sold Gross profit IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income $ 778,000 431,000 347,000 87,000 78,600 181,400 4,000 185,400 45,890 $ 139,510 Additional Information a. A $30,000 notes 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 Operating Expenses on the income statement. f. All purchases and sales of inventory are on credit. Exercise 12-12 (Algo) Part 1 Required: (1) Prepare a statement of cash flows using the indirect method for the year ended June 30, 2021. Note: Amounts to be deducted should be indicated with a minus sign. Cash flows from operating activities IKIBAN, INCORPORATED Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2021 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 + S 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
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