! Required information [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 $52,000 59,000 98,500 7,000 216,500 Cash $102,700 Accounts receivable, net Inventory Prepaid expenses 77,000 71,800 5,200 256,700 Total current assets 123,000 (13,000) Equipment Accum depreciation-Equipment 132,000 (31,000) $357,700 $326,500 Total assets Liabilities and Equity Accounts payable Wages payable Income taxes payable Total current liabilities $33,000 6,800 4,200 44,000 42,000 16,600 5,400 64,000 38,000 82,000 68,000 132,000 Notes payable (long term) Total liabilities Equity Common stock, $5 par value Retained earnings 168,000 26,500 236,000 39,700 Total liabilities and equity $357,700 $326,500 IKIBAN INC. Income Statement For Year Ended June 30, 2019 Sales $718,000 419,000 Cost of goods sold Gross profit Operating expenses Depreciation expense 299,000 $66,600 n+har avnanoae 75 000 IKIBAN INC Income Statement For Year Ended June 30, 2019 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense Other expenses Total operating expenses $718,000 419,000 299,000 $66,600 75,000 141,600 157,400 other gains (losses) Gain on sale of equipment 2,800 160,200 Income before taxes Income taxes expense 44,690 $115,510 Net income 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 $65,600 cash d. Received cash for the sale of equipment that had cost $56,600, yielding a $2,800 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. 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.) 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 $65,600 cash d. Received cash for the sale of equipment that had cost $56,600, yielding a $2,800 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. 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.) IKIBAN, INC. Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2019 Cash flows from operating activities Net income 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 Increase in accounts receivable Decrease in inventory Decrease in prepaid expenses Decrease in accounts payable Decrease in wages payable Decrease in income taxes payable ! Required information 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 Increase in accounts receivable Decrease in inventory Decrease in prepaid expenses Decrease in accounts payable Decrease in wages payable Decrease in income taxes payable Net cash provided by operating activities $ 0 Cash flows from investing activities Cash received from sale of equipment Cash paid for equipment Net cash provided by investing activities Cash flows from financing activities Cash received from stock issuance 0 Cash paid to retire notes Cash paid for dividends Net cash used in financing activities 0 Net increase (decrease) in cash Cash balance at prior year-end $ 0 Cash balance at current vear-end C EA
