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The following financial statements and additional information are reported. IKIBAN INCORPORATED Comparative Balance Sheets At June 30 2021 2020 Assets Cash $87,500 $44,000 Accounts receivable,
The following financial statements and additional information are reported. |
IKIBAN INCORPORATED | |||||
Comparative Balance Sheets | |||||
At June 30 | 2021 | 2020 | |||
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 | |||
Accumulated 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 INCORPORATED | |||||
Income Statement | |||||
For Year Ended June 30, 2021 | |||||
Sales | $678,000 | ||||
Cost of goods sold | 411,000 | ||||
Gross profit | 267,000 | ||||
Operating expenses (excluding depreciation) | 67,000 | ||||
Depreciation expense | 58,600 | ||||
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. A $30,000 notes payable is retired at its $30,000 carrying (book) value in exchange for cash. | Notes Payable | $30,000 | |||
b. The only changes affecting retained earnings are net income and cash dividends paid. | |||||
c. New equipment is acquired for $57,600 cash. | Cash paid for Equipment | $57,600 | |||
e. Received cash for the sale of equipment that had cost $48,600, yielding a $2,000 gain. | Equipment cost | $48,600 | |||
f. Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement. | |||||
g. 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. | ||||
(Use cells A3 to A25 from Chart of Accounts A4 to G48 from the given information to complete this question. (Amounts to be deducted should be indicated with a minus sign.)) | ||||
IKIBAN, INCORPORATED | ||||
Statement of Cash Flows (Indirect Method) | ||||
For Year Ended June 30, 2021 | ||||
Cash flows from operating activities | ||||
Net income | $99,510 | |||
Adjustments to reconcile net income to net cash provided by operating activities | ||||
Income statement items not affecting cash | ||||
Depreciation expense | 58,600 | |||
Gain on sale of plant assets | (2,000) | |||
Changes in current operating assets and liabilities | ||||
Increase in accounts receivable | (14,000) | |||
Decrease in inventory | 22,700 | |||
Decrease in prepaid expenses | 1,000 | |||
Decrease in accounts payable | (5,000) | |||
Decrease in wages payable | (9,000) | |||
Decrease in income taxes payable | (400) | |||
Net cash provided by operating activities | $151,410 | |||
Cash flows from investing activities | ||||
**Cash received from sale of equipment** ( Please post how and where you are pulling this information from) | ||||
Cash flows from financing activities | ||||
Net increase (decrease) in cash | ||||
Cash balance at prior year-end | ||||
Cash balance at current year-end | ||||
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