Required information

Exercise 16-12 (Algo) Indirect: Preparing statement of cash flows LO P2, P3, A1

Skip to question

[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	$ 102,700	$ 52,000
Accounts receivable, net	77,000	59,000
Inventory	71,800	98,500
Prepaid expenses	5,200	7,000
Total current assets	256,700	216,500
Equipment	132,000	123,000
Accumulated depreciationEquipment	(31,000)	(13,000)
Total assets	$ 357,700	$ 326,500
Liabilities and Equity
Accounts payable	$ 33,000	$ 42,000
Wages payable	6,800	16,600
Income taxes payable	4,200	5,400
Total current liabilities	44,000	64,000
Notes payable (long term)	38,000	68,000
Total liabilities	82,000	132,000
Equity
Common stock, $5 par value	236,000	168,000
Retained earnings	39,700	26,500
Total liabilities and equity	$ 357,700	$ 326,500

IKIBAN INCORPORATED
Income Statement
For Year Ended June 30, 2021
Sales	$ 718,000
Cost of goods sold	419,000
Gross profit	299,000
Operating expenses (excluding depreciation)	75,000
Depreciation expense	66,600
	157,400
Other gains (losses)
Gain on sale of equipment	2,800
Income before taxes	160,200
Income taxes expense	44,690
Net income	$ 115,510

Additional Information

1. A $30,000 notes payable is retired at its $30,000 carrying (book) value in exchange for cash.
2. The only changes affecting retained earnings are net income and cash dividends paid.
3. New equipment is acquired for $65,600 cash.
4. Received cash for the sale of equipment that had cost $56,600, yielding a $2,800 gain.
5. Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement.
6. All purchases and sales of inventory are on credit.

Exercise 16-12 (Algo) Part 1

Required:

(1) Prepare a statement of cash flows using the indirect method for the year ended June 30, 2021. (Amounts to be deducted should be indicated with a minus sign.)

KIBAN, INCORPORATED atatement of Cash Flow Indirect Method For Year Ended June 30, 2021 Cash flow from operating activities Adjustments to reconcile not income to net cash provided by operating activities Income statement tam not affecting cam Changes in current operating Assets and abilities s Cash flows from investing advies Cash flows from financing activities 5 Not increase (decrease in cash Cash balance at prior year-end Cash balance Aurontyear and 5