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. 2019 IKIBAN INC. Comparative Balance Sheets At June 30 2020 Assets Cash $ 99,700 Accounts receivable, net 84,500 Inventory 76,800 Prepaid expenses 5,700 Total current assets 266,700 Equipment 137,000 Accum. depreciation-Equipment (33,500) Total assets $370, 200 Liabilities and Equity Accounts payable $ 38,000 Wages payable 7,300 Income taxes payable 4,700 Total current liabilities 50,000 Notes payable (long term) 43,000 Total liabilities 93,000 Equity Common stock, $5 par value 246,000 Retained earnings 31,200 Total liabilities and equity $370,200 $ 57,000 64,000 106,000 8,000 235,000 128,000 (15,500) $347,500 $ 49,500 17,600 6,400 73,500 73,000 146,500 173,000 28,000 $347,500 43,000 93,000 73,000 146,500 Notes payable (long term) Total liabilities Equity Common stock, $5 par value Retained earnings Total liabilities and equity 246,000 31,200 $370,200 173,000 28,000 $347,500 IKIBAN INC Income Statement For Year Ended June 30, 2020 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income $ 743,000 424,000 319,000 80,000 71,600 167,400 3,300 170,700 45,190 125,510 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 $70,600 cash. d. Received cash for the sale of equipment that had cost $61,600 yielding a $3,300 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 1 152:31 Required: (1) Prepare a statement of cash flows using the direct method for the year ended June 30, 2020. (Amounts to be deducted should be indicated with a minus sign.) IKIBAN INC Statement of Cash Flow Indirect Method) For Year Ended June 30, 2019 Cathflows from operating activities Net income 5 123.510 Adjustments to reconcile income cash provided by opening activities Income tame tems not affecting ca Deeocation and 70 800 Ganon sale of plasses (3200) Changes in content operating assets and its Daca in accounts receivable Decrease in inventory Decrease in prepaid expenses Decrease in accounts payable Decrease in wages payable 20,000) 28.700 2 200 (11 000) (10.2009 30 Required information Decrease in accounts receivable Decrease in inventory Decrease in prepaid expenses Decrease in accounts payable Decrease in wages payable Decrease in income taxes payable (20,000 20 700 2.200 (11 000 (10.2003 (1600) $ 179,010 Cash flows from investing activities 0 Cashflows from financing activities 0 179.010 $ Net increase (decrease in cash Cash balance at prior year-end Cash balance at current year-end $ 179,010