Question
[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,
[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 | $ | 94,300 | $ | 66,000 | ||||
Accounts receivable, net | 98,000 | 73,000 | ||||||
Inventory | 85,800 | 119,500 | ||||||
Prepaid expenses | 6,600 | 9,800 | ||||||
Total current assets | 284,700 | 268,300 | ||||||
Equipment | 146,000 | 137,000 | ||||||
Accum. depreciationEquipment | (38,000 | ) | (20,000 | ) | ||||
Total assets | $ | 392,700 | $ | 385,300 | ||||
Liabilities and Equity | ||||||||
Accounts payable | $ | 47,000 | $ | 63,000 | ||||
Wages payable | 8,200 | 19,400 | ||||||
Income taxes payable | 5,600 | 8,200 | ||||||
Total current liabilities | 60,800 | 90,600 | ||||||
Notes payable (long term) | 52,000 | 82,000 | ||||||
Total liabilities | 112,800 | 172,600 | ||||||
Equity | ||||||||
Common stock, $5 par value | 264,000 | 182,000 | ||||||
Retained earnings | 15,900 | 30,700 | ||||||
Total liabilities and equity | $ | 392,700 | $ | 385,300 | ||||
IKIBAN INC. Income Statement For Year Ended June 30, 2017 | ||||||
Sales | $ | 788,000 | ||||
Cost of goods sold | 433,000 | |||||
Gross profit | 355,000 | |||||
Operating expenses | ||||||
Depreciation expense | $ | 80,600 | ||||
Other expenses | 89,000 | |||||
Total operating expenses | 169,600 | |||||
185,400 | ||||||
Other gains (losses) | ||||||
Gain on sale of equipment | 4,200 | |||||
Income before taxes | 189,600 | |||||
Income taxes expense | 46,090 | |||||
Net income | $ | 143,510 | ||||
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 $79,600 cash.
Received cash for the sale of equipment that had cost $70,600, yielding a $4,200 gain.
Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.
All purchases and sales of inventory are on credit.
rev: 12_05_2017_QC_CS-111198
Exercise 12-11 Part 1
Required:
(1) Prepare a statement of cash flows for the year ended June 30, 2017, using the indirect method
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