Required information Exercise 16-11 Indirect: Preparing statement of cash flows LO P1, P2, P3, A1 [The following information applies to the questions displayed below.) The following financial statements and additional Information are reported. 2016 IKIBAN INO. Comparative Balance Sheets June 30, 2017 and 2016 2017 Assets Cash $ 93,100 Accounts receivable, net 101,000 Inventory 87,800 Prepaid expenses 6,800 Total ent 288,700 Equipment 148.000 Aceum. depreciation Equipment 39.000) Total assets $397.700 Liabilities and Equity Accounts payable $ 49,000 Wages payable 8,400 Income taxes payable 5,800 Total current liabilities 63,200 Notes payable (long term) 54,000 Total liabilities 117,200 Equity Common stock, $5 par value 268,000 Retained earnings 12,500 Total liabilities and equity $397, 700 $ 68,000 75,000 122,500 10,200 275, 700 139,000 (21,000) $393,700 $ 66,000 19,800 8,600 94,400 84,000 178,400 184,000 31,300 $393,700 IKIBAN INC. Income Statement For Year Ended June 30, 2017 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $82,600 other expenses 91 000 Total operating expenses $798,000 435,000 363,000 173.600 189,400 hal Retained anings Total liabilities and equity 12, DUU $397, 700 24 $393,700 $798,000 435,000 363,000 IKIBAN INC. Income Statement For Year Ended June 30, 2017 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $82,600 Other expenses 91,000 Total operating expenses Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 173,600 189,400 4,400 193,800 46.290 $147,510 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 $81,600 cash. d. Received cash for the sale of equipment that had cost $72,600. yielding a $4.400 gain. e. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement f. All purchases and sales of inventory are on credit. Exercise 16-11 Part 1 Required: (1) Prepare a statement of cash flows for the year ended June 30, 2017 using the indirect method (Amounts to be deducted should be indicated with a minus sign.) 6 Required: (1) Prepare a statement of cash flows for the year ended June 30, 2017 using the Indirect method (Amounts to be deducted should be indicated with a minus sign.) 17 points Answer is not complete. IKIBAN, INC. Statement of Cash Flows indirect Method) For Year Ended June 30, 2017 Cash flows from operating activities Net Income 147.510 Adjustments to reconcile net income to net cash provided by operating activities Income statement hems not affecting cash Depreciation expense 82,600 Gain on sale of plant assets 14.400) Oo Changes in current operating assets and abilities Increase in accounts receivable Decrease in inventory Decrease in prepaid expenses Decrease in accounts payable Decrease in wages payable Decrease in income taxes payable (26.000) 34,700 3,400 (17.000) (11.400) (2.800) $ 206,610 Net cash provided by operating activities Cash fows from investing activities Cash received from sale of equipment Cash paid for equipment OOOOOOO OOOOOOO O Nel cash used in investing activities Cash flows from financing activities Cash received from stock issuance Cash paid to retire notes Cash paid for dividends 84,000 (20.000) 54,000 260,610 5 Net cash used in financing activities Net Increase (decrease in cash Cash balance at prior year-end Cash balance current year-end S 760,610