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Required information Exercise 12-12 (Algo) Indirect: Preparing statement of cash flows LO P2, P3, A1 Skip to question [The following information applies to the questions

Required information

Exercise 12-12 (Algo) Indirect: Preparing statement of cash flows LO P2, P3, A1

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[The following information applies to the questions displayed below.]

The following financial statements and additional information are reported.

IKIBAN INCORPORATED
Comparative Balance Sheets
At June 30 2021 2020
Assets
Cash $ 99,100 $ 58,000
Accounts receivable, net 86,000 65,000
Inventory 77,800 107,500
Prepaid expenses 5,800 8,200
Total current assets 268,700 238,700
Equipment 138,000 129,000
Accumulated depreciationEquipment (34,000) (16,000)
Total assets $ 372,700 $ 351,700
Liabilities and Equity
Accounts payable $ 39,000 $ 51,000
Wages payable 7,400 17,800
Income taxes payable 4,800 6,600
Total current liabilities 51,200 75,400
Notes payable (long term) 44,000 74,000
Total liabilities 95,200 149,400
Equity
Common stock, $5 par value 248,000 174,000
Retained earnings 29,500 28,300
Total liabilities and equity $ 372,700 $ 351,700
IKIBAN INCORPORATED
Income Statement
For Year Ended June 30, 2021
Sales $ 748,000
Cost of goods sold 425,000
Gross profit 323,000
Operating expenses (excluding depreciation) 81,000
Depreciation expense 72,600
169,400
Other gains (losses)
Gain on sale of equipment 3,400
Income before taxes 172,800
Income taxes expense 45,290
Net income $ 127,510

Additional Information

  1. A $30,000 notes payable is retired at its $30,000 carrying (book) value in exchange for cash.
  2. The only changes affecting retained earnings are net income and cash dividends paid.
  3. New equipment is acquired for $71,600 cash.
  4. Received cash for the sale of equipment that had cost $62,600, yielding a $3,400 gain.
  5. Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement.
  6. All purchases and sales of inventory are on credit.

Exercise 12-12 (Algo) Part 2

(2) Compute the companys cash flow on total assets ratio for its fiscal year 2021.

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