Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Costing

Authors: Terry Lucey

5th Edition

1858051657, 9781858051659

More Books

Students also viewed these Accounting questions