Required information

Exercise 16-10 Indirect: Preparation of statement of cash flows LO P1

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

The following financial statements and additional information are reported.

IKIBAN INC. Comparative Balance Sheets June 30, 2013 and 2012
	2013				2012
Assets
Cash	$	109,400			$	63,200
Accounts receivable, net		69,200				51,400
Inventory		66,300				96,200
Prepaid expenses		6,400				4,300
Equipment		124,600				113,000
Accum. depreciationEquipment		(28,800	)			(10,200	)
Total assets	$	347,100			$	317,900
Liabilities and Equity
Accounts payable	$	26,400			$	32,700
Wages payable		7,900				17,000
Income taxes payable		2,300				3,800
Notes payable (long term)		49,000				71,000
Common stock, $5 par value		236,000				186,000
Retained earnings		25,500				7,400
Total liabilities and equity	$	347,100			$	317,900

IKIBAN INC. Income Statement For Year Ended June 30, 2013
Sales				$	676,000
Cost of goods sold					410,000
Gross profit					266,000
Operating expenses
Depreciation expense	$	58,400
Other expenses		66,100
Total operating expenses					124,500
					141,500
Other gains (losses)
Gain on sale of equipment					2,500
Income before taxes					144,000
Income taxes expense					57,600
Net income				$	86,400

Additional Information

a.	A $22,000 note payable is retired at its $22,000 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 $60,500 cash.
d.	Received cash for the sale of equipment that had cost $48,900, yielding a $2,500 gain.
e.	Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.
f.	All purchases and sales of merchandise inventory are on credit.

Exercise 16-10 Part 1

Required:
(1)	Prepare a statement of cash flows for the year ended June 30, 2013, using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)