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 INC. Comparative Balance Sheets June 30, 2017 and 2016 2017 Assets Cash $ 105,700 Accounts receivable, net 69,500 Inventory 66,800 Prepaid expenses 4,700 Total current assets 246,700 Equipment 127,000 Accum. depreciation Equipment (28,500) Total assets $345,200 Liabilities and Equity Accounts payable $ 28,000 Wages payable 6,300 Income taxes payable 3,700 Total current liabilities 38,000 Notes payable (long term) 33,000 Total liabilities 71,000 Equity Common stock, $5 par value 226,000 Retained earnings 48,200 Total liabilities and equity $345,200 $ 47,000 54,000 91,000 6,000 198,000 118,000 (10,500) $ 305,500 $ 34,500 15,600 4,400 54,500 63,000 117,500 163,000 25,000 $305,500 IKIBAN INC. Income Statement For Year Ended June 30, 2017 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $61,600 Other expenses 70,000 Total operating expenses $693,000 414,000 279,000 131,600 147,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 2,300 149,700 44,190 $105,510 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 $60,600 cash. d. Received cash for the sale of equipment that had cost $51,600, yielding a $2,300 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.) IKIBAN, INC. Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2017 Cash flows from operating activities Net income $ 105,510 Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Depreciation expense Gain on sale of plant assets Changes in current operating assets and liabilities $ 105,510 Cash flows from investing activities Cash flows from financing activities $ 105,510 Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end | $ 105,510