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Required information Skip to question [The following information applies to the questions displayed below.] The following financial statements and additional information are reported. IKIBAN INC.
Required information
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[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, 2019 and 2018 | ||||||||
2019 | 2018 | |||||||
Assets | ||||||||
Cash | $ | 105,700 | $ | 47,000 | ||||
Accounts receivable, net | 69,500 | 54,000 | ||||||
Inventory | 66,800 | 91,000 | ||||||
Prepaid expenses | 4,700 | 6,000 | ||||||
Total current assets | 246,700 | 198,000 | ||||||
Equipment | 127,000 | 118,000 | ||||||
Accum. depreciationEquipment | (28,500 | ) | (10,500 | ) | ||||
Total assets | $ | 345,200 | $ | 305,500 | ||||
Liabilities and Equity | ||||||||
Accounts payable | $ | 28,000 | $ | 34,500 | ||||
Wages payable | 6,300 | 15,600 | ||||||
Income taxes payable | 3,700 | 4,400 | ||||||
Total current liabilities | 38,000 | 54,500 | ||||||
Notes payable (long term) | 33,000 | 63,000 | ||||||
Total liabilities | 71,000 | 117,500 | ||||||
Equity | ||||||||
Common stock, $5 par value | 226,000 | 163,000 | ||||||
Retained earnings | 48,200 | 25,000 | ||||||
Total liabilities and equity | $ | 345,200 | $ | 305,500 | ||||
IKIBAN INC. Income Statement For Year Ended June 30, 2019 | ||||||
Sales | $ | 693,000 | ||||
Cost of goods sold | 414,000 | |||||
Gross profit | 279,000 | |||||
Operating expenses | ||||||
Depreciation expense | $ | 61,600 | ||||
Other expenses | 70,000 | |||||
Total operating expenses | 131,600 | |||||
147,400 | ||||||
Other gains (losses) | ||||||
Gain on sale of equipment | 2,300 | |||||
Income before taxes | 149,700 | |||||
Income taxes expense | 44,190 | |||||
Net income | $ | 105,510 | ||||
Additional Information
- A $30,000 note payable is retired at its $30,000 carrying (book) value in exchange for cash.
- The only changes affecting retained earnings are net income and cash dividends paid.
- New equipment is acquired for $60,600 cash.
- Received cash for the sale of equipment that had cost $51,600, yielding a $2,300 gain.
- Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.
- All purchases and sales of inventory are on credit.
Required:
(1) Prepare a statement of cash flows using the indirect method for the year ended June 30, 2019. (Amounts to be deducted should be indicated with a minus sign.)
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