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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
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 | ||||||||
Cash | $ | 95,500 | $ | 64,000 | ||||
Accounts receivable, net | 95,000 | 71,000 | ||||||
Inventory | 83,800 | 116,500 | ||||||
Prepaid expenses | 6,400 | 9,400 | ||||||
Total current assets | 280,700 | 260,900 | ||||||
Equipment | 144,000 | 135,000 | ||||||
Accum. depreciationEquipment | (37,000 | ) | (19,000 | ) | ||||
Total assets | $ | 387,700 | $ | 376,900 | ||||
Liabilities and Equity | ||||||||
Accounts payable | $ | 45,000 | $ | 60,000 | ||||
Wages payable | 8,000 | 19,000 | ||||||
Income taxes payable | 5,400 | 7,800 | ||||||
Total current liabilities | 58,400 | 86,800 | ||||||
Notes payable (long term) | 50,000 | 80,000 | ||||||
Total liabilities | 108,400 | 166,800 | ||||||
Equity | ||||||||
Common stock, $5 par value | 260,000 | 180,000 | ||||||
Retained earnings | 19,300 | 30,100 | ||||||
Total liabilities and equity | $ | 387,700 | $ | 376,900 | ||||
IKIBAN INC. Income Statement For Year Ended June 30, 2019 | ||||||
Sales | $ | 778,000 | ||||
Cost of goods sold | 431,000 | |||||
Gross profit | 347,000 | |||||
Operating expenses | ||||||
Depreciation expense | $ | 78,600 | ||||
Other expenses | 87,000 | |||||
Total operating expenses | 165,600 | |||||
181,400 | ||||||
Other gains (losses) | ||||||
Gain on sale of equipment | 4,000 | |||||
Income before taxes | 185,400 | |||||
Income taxes expense | 45,890 | |||||
Net income | $ | 139,510 | ||||
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 $77,600 cash.
- Received cash for the sale of equipment that had cost $68,600, yielding a $4,000 gain.
- Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.
- All purchases and sales of inventory are on credit.
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