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Required information Exercise 16-12 (Algo) Indirect: Preparing statement of cash flows LO P2, P3, A1 [The following information applies to the questions displayed below.] The

Required information

Exercise 16-12 (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.

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 2

(2) Compute the companys cash flow on total assets ratio for its fiscal year 2021.

image text in transcribed

Choose Numerator: = Cash Flow on Total Assets Ratio 1 Choose Denominator: Cash Flow on Total Assets Ratio Cash flow on total assets ratio 0

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