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[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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