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