Required information The following information applies to the questions displayed below) The following financial statements and additional information are reported. 2020 $ 63,000 70,000 115,000 9,200 257,200 134,000 (18.500) $ 372,700 IKIBAN INCORPORATED Comparative Balance Sheets At June 30 2021 Assets Cash $ 96,100 Accounts receivable, net 93,500 Inventory 82,800 Prepaid expenses 6,300 Total current assets 278,700 Equipment 143,000 Accumulated depreciation-Equipment (36,500) Total assets $ 385,200 Liabilities and Equity Accounts payable $ 44,000 Wages payable 7,900 Income taxes payable 5,300 Total current liabilities 57,200 Notes payable (long term) 49,000 Total liabilities 106,200 Equity Common stock, $5 par value 258,000 Retained earning 21,000 Total liabilities and equity $ 385,200 $ 58,500 18,800 7,600 84,900 79,000 163,900 179,000 29,800 $ 372,700 IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense $. 773,000 430,000 343,000 86,000 77,600 179,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 3,900 183,300 45,790 $ 137,510 Additional Information a. A $30,000 notes 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 $76,600 cash. d. Received cash for the sale of equipment that had cost $67,600, yielding a $3,900 gain. e. Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement 1. 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, 2021. (Amounts to be deducted should be indicated with a minus sign.) ikiet, INCORPORATED Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2021 Cash flows from operating activities Net Income 137.510 Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Depreciation expense 77,600 Gain on sale of plant assets (3.900) $ 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 (23,500) 32,200 2,900 (14,500) (10,900) (2.300) $ 195.110 Net cash provided by operating activities Cash flows from investing activides Cash received from sale of equipment Cash paid for equipment 0 Net cash used in investing activities Cash flows from financing activities Cash paid to retire notes Cash paid for dividends Cash received from stock issuance 0 $ 195, 110 Net increase (decrease in cash Cash balance at prior year-end Cash balance at current year-end $ 195.110
