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 | $ | 87,500 | $ | 44,000 | ||||
Accounts receivable, net | 65,000 | 51,000 | ||||||
Inventory | 63,800 | 86,500 | ||||||
Prepaid expenses | 4,400 | 5,400 | ||||||
Total current assets | 220,700 | 186,900 | ||||||
Equipment | 124,000 | 115,000 | ||||||
Accum. depreciationEquipment | (27,000 | ) | (9,000 | ) | ||||
Total assets | $ | 317,700 | $ | 292,900 | ||||
Liabilities and Equity | ||||||||
Accounts payable | $ | 25,000 | $ | 30,000 | ||||
Wages payable | 6,000 | 15,000 | ||||||
Income taxes payable | 3,400 | 3,800 | ||||||
Total current liabilities | 34,400 | 48,800 | ||||||
Notes payable (long term) | 30,000 | 60,000 | ||||||
Total liabilities | 64,400 | 108,800 | ||||||
Equity | ||||||||
Common stock, $5 par value | 220,000 | 160,000 | ||||||
Retained earnings | 33,300 | 24,100 | ||||||
Total liabilities and equity | $ | 317,700 | $ | 292,900 | ||||
IKIBAN INC. Income Statement For Year Ended June 30, 2017 | ||||||
Sales | $ | 678,000 | ||||
Cost of goods sold | 411,000 | |||||
Gross profit | 267,000 | |||||
Operating expenses | ||||||
Depreciation expense | $ | 58,600 | ||||
Other expenses | 67,000 | |||||
Total operating expenses | 125,600 | |||||
141,400 | ||||||
Other gains (losses) | ||||||
Gain on sale of equipment | 2,000 | |||||
Income before taxes | 143,400 | |||||
Income taxes expense | 43,890 | |||||
Net income | $ | 99,510 | ||||
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 $57,600 cash.
Received cash for the sale of equipment that had cost $48,600, yielding a $2,000 gain.
Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.
All purchases and sales of inventory are on credit.
equired:
(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.)
2. Compute the company's cash flow on total assets ratio for its fiscal year 2017.
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