xercise 16-19B (Algo) Direct: Preparing statement of cash flows LO P5

The following financial statements and additional information are reported.

IKIBAN INCORPORATED
Comparative Balance Sheets
At June 30	2021	2020
Assets
Cash	$ 74,300	$ 66,000
Accounts receivable, net	98,000	73,000
Inventory	85,800	119,500
Prepaid expenses	6,600	9,800
Total current assets	264,700	268,300
Equipment	146,000	137,000
Accumulated depreciationEquipment	(38,000)	(20,000)
Total assets	$ 372,700	$ 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)	34,400	82,000
Total liabilities	95,200	172,600
Equity
Common stock, $5 par value	264,000	182,000
Retained earnings	13,500	30,700
Total liabilities and equity	$ 372,700	$ 385,300

IKIBAN INCORPORATED
Income Statement
For Year Ended June 30, 2021
Sales	$ 788,000
Cost of goods sold	433,000
Gross profit	355,000
Operating expenses (excluding depreciation)	89,000
Depreciation expense	80,600
	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

1. A $47,600 note payable is retired at its $47,600 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 $79,600 cash.
4. Received cash for the sale of equipment that had cost $70,600, yielding a $4,200 gain.
5. Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement.
6. All purchases and sales of inventory are on credit.

Using the direct method, prepare the statement of cash flows for the year ended June 30, 2021.

Note: Amounts to be deducted should be indicated with a minus sign.