Required information

Use the following information for the Exercises below.

[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, 2018 and 2017
	2018				2017
Assets
Cash	$	80,900			$	55,000
Accounts receivable, net		81,500				62,000
Inventory		74,800				103,000
Prepaid expenses		5,500				7,600
Total current assets		242,700				227,600
Equipment		135,000				126,000
Accum. depreciationEquipment		(32,500	)			(14,500	)
Total assets	$	345,200			$	339,100
Liabilities and Equity
Accounts payable	$	36,000			$	46,500
Wages payable		7,100				17,200
Income taxes payable		4,500				6,000
Total current liabilities		47,600				69,700
Notes payable (long term)		41,000				71,000
Total liabilities		88,600				140,700
Equity
Common stock, $5 par value		242,000				171,000
Retained earnings		14,600				27,400
Total liabilities and equity	$	345,200			$	339,100

IKIBAN INC. Income Statement For Year Ended June 30, 2018
Sales				$	733,000
Cost of goods sold					422,000
Gross profit					311,000
Operating expenses
Depreciation expense	$	69,600
Other expenses		78,000
Total operating expenses					147,600
					163,400
Other gains (losses)
Gain on sale of equipment					3,100
Income before taxes					166,500
Income taxes expense					44,990
Net income				$	121,510

Additional Information

1. A $30,000 note payable is retired at its $30,000 carrying (book) value in exchange for cash.
2. The only changes affecting retained earnings are net income and cash dividends paid.
3. New equipment is acquired for $68,600 cash.
4. Received cash for the sale of equipment that had cost $59,600, yielding a $3,100 gain.
5. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.
6. All purchases and sales of inventory are on credit.

rev: 11_20_2018_QC_CS-148804

Exercise 12-11 Indirect: Preparing statement of cash flows (Part 1) LO P1, P2, P3, A1

Required:

(1) Prepare a statement of cash flows for the year ended June 30, 2018, 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, 2018
Cash flows from operating activities
Net income	$121,510
Adjustments to reconcile net income to net cash provided by operating activities
Income statement items not affecting cash
Depreciation expense	69,600
Gain on sale of plant assets	(3,100)
Changes in current operating assets and liabilities
Increase in accounts receivable
		$188,010
Cash flows from investing activities
		0
Cash flows from financing activities
		0
Net increase (decrease) in cash		$188,010
Cash balance at prior year-end
Cash balance at current year-end		$188,010