Question
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, 2017 and 2016 | ||||||||
2017 | 2016 | |||||||
Assets | ||||||||
Cash | $ | 93,700 | $ | 67,000 | ||||
Accounts receivable, net | 99,500 | 74,000 | ||||||
Inventory | 86,800 | 121,000 | ||||||
Prepaid expenses | 6,700 | 10,000 | ||||||
Total current assets | 286,700 | 272,000 | ||||||
Equipment | 147,000 | 138,000 | ||||||
Accum. depreciationEquipment | (38,500 | ) | (20,500 | ) | ||||
Total assets | $ | 395,200 | $ | 389,500 | ||||
Liabilities and Equity | ||||||||
Accounts payable | $ | 48,000 | $ | 64,500 | ||||
Wages payable | 8,300 | 19,600 | ||||||
Income taxes payable | 5,700 | 8,400 | ||||||
Total current liabilities | 62,000 | 92,500 | ||||||
Notes payable (long term) | 53,000 | 83,000 | ||||||
Total liabilities | 115,000 | 175,500 | ||||||
Equity | ||||||||
Common stock, $5 par value | 266,000 | 183,000 | ||||||
Retained earnings | 14,200 | 31,000 | ||||||
Total liabilities and equity | $ | 395,200 | $ | 389,500 | ||||
IKIBAN INC. Income Statement For Year Ended June 30, 2017 | ||||||
Sales | $ | 793,000 | ||||
Cost of goods sold | 434,000 | |||||
Gross profit | 359,000 | |||||
Operating expenses | ||||||
Depreciation expense | $ | 81,600 | ||||
Other expenses | 90,000 | |||||
Total operating expenses | 171,600 | |||||
187,400 | ||||||
Other gains (losses) | ||||||
Gain on sale of equipment | 4,300 | |||||
Income before taxes | 191,700 | |||||
Income taxes expense | 46,190 | |||||
Net income | $ | 145,510 | ||||
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 $80,600 cash.
Received cash for the sale of equipment that had cost $71,600, yielding a $4,300 gain.
Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.
All purchases and sales of inventory are on credit.
rev: 06_20_2017_QC_CS-91585, 12_05_2017_QC_CS-111198
Required:
(1) Prepare a statement of cash flows for the year ended June 30, 2017, using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)
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