Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The following financial statements and additional information are reported. 2020 $ 62,000 69,000 113,500 9,000 253,500 133,000 (18,000) $ 368,500 IKIBAN INCORPORATED Comparative Balance Sheets

image text in transcribed
image text in transcribed
The following financial statements and additional information are reported. 2020 $ 62,000 69,000 113,500 9,000 253,500 133,000 (18,000) $ 368,500 IKIBAN INCORPORATED Comparative Balance Sheets At June 30 2021 Assets Cash $ 96,700 Accounts receivable, net 92,000 Inventory 81,800 Prepaid expenses 6,200 Total current assets 276,700 Equipment 142,000 Accumulated depreciation Equipment (36,000) Total assets $ 382,700 Liabilities and Equity Accounts payable $ 43,000 Wages payable 7,800 Income taxes payable 5,200 Total current liabilities 56,000 Notes payable (long term) 48,000 Total liabilities 104,000 Equity Common stock, 55 par value 256,000 Retained earnings 22,700 Total liabilities and equity $ 382,700 $ 57,000 18,600 7.400 83,000 78,000 161,000 178,000 29,500 $ 368,500 IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense $ 768,000 429,000 339,000 85,000 76,600 177,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 3,800 181,200 45,690 $ 135,510 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 $75,600 cash d. Received cash for the sale of equipment that had cost $66,600 yielding a $3,800 gain. e. Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement. f. 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.) Answer is not complete. IKIBAN, INCORPORATED Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2021 Cash flows from operating activities Net Income Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Depreciation expense + $ 135,510 76,600 Changes in current operating assets and liabilities Decrease in Inventory Cash paid for equipment Increase in accounts receivable Decrease in prepaid expenses Cash received from sale of equipment ooO (31,700) 75,600 23,000 2.800 66,600 $ 348,410 X 10,800 Cash flows from investing activities Decrease in wages payablo Decrease in accounts payable (14,000) (3,200) Cash flows from financing activities Cash received from stock issuance Cash paid for income taxes BE 0 345,210 Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end 345,210

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

Cost Accounting Principles And Applications

Authors: Horace R. Brock

5th Edition

0070081522, 978-0070081529

More Books

Students also viewed these Accounting questions