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 Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets $102,100 $ 53,000 60,000 72,800100,000 7,200 258,700 220,200 124,000 78,500 5,300 133,000 (31,500)13,500) 360,200 $330,700 Liabilities and Equity Accounts payable Wages payable Income taxes payable Total current liabilities Notes payable (long term) Total liabilities Equity Common stock, $5 par value Retained earnings s 34,000 $ 43,500 16,800 5,600 65,900 39,00069,000 4/200 134,900 6,900 4,300 45,20065 238,000169,000 26,800 $360,200 $330,700 38,000 Total liabilities and equity IKIBAN INC. Income Statement For Year Ended June 30, 2017 Sales Cost of goods sold Gross profit Operating expenses $723,000 420,000 303,000 Depreciation expense $67,600 76,000 Other expenses Total operating expenses 143,600 159,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 2,900 162,300 44,790 $117,510 Additional Information a. A $30,000 note payable b. The only changes affecting retained earnings are net income and cash dividends paid c. New equipment is acquired for $66,600 cash. d. Received cash for the sale of equipment that had cost $57,600, yielding a $2,900 gain. e. Prepaid f. All purchases and sales of inventory are on credit. is retired at its $30,000 carrying (book) value in exchange for cash. Expenses and Wages Payable relate to Other Expenses on the income statement. 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.) IKIBAN, INC. Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2017 Cash flows from operating activities Net income $ 117,510 Adjustments to reconcile net income to net cash provided by operating activies Income statement items not affecting cash Depreciation expense Gain on sale of plant assets (2,900) Changes in current operating assets and liabilities Increase in accounts receivable (18,500) 27.200 1,900 (9,500) (9,900 (1,300) nventory Decrease in prepaid expenses Decrease in accounts payable Decrease in wages payable Net cash provided by operating activities Cash flows from investing activities S 172 110 Cash received from sale of equipment Cash baid for eauioment 66.6001 0 Required information Increase in accounts receivable Decrease in inventory Decrease in prepaid expenses Decrease in accounts payable Decrease in wages payable Decrease in income taxes payable (18,500) 27,200 1,900 (9,500) (9,900) (1,300) Net cash provided by operating activities $ 172,110 Cash flows from investing activities Cash received from sale of equipment Cash paid for equipment (66,600) Net cash used in investing activities (66,600) Cash flows from financing activities Cash received from stock issuance Cash paid to retire notes Cash paid for dividends (30,000) (30,000) 75,510 Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end 75,510
