IKIBAN INC. Comparative Balance Sheets June 30, 2019 and 2018 2019 2018 Assets Cash $ 105,700 $ 47,000 Accounts receivable, net 69,500 54,000 Inventory 66,800 91,000 Prepaid expenses 4,700 6,000 Total current assets 246,700 198,000 Equipment 127,000 118,000 Accum. depreciation—Equipment (28,500 ) (10,500 ) Total assets $ 345,200 $ 305,500 Liabilities and Equity Accounts payable $ 28,000 $ 34,500 Wages payable 6,300 15,600 Income taxes payable 3,700 4,400 Total current liabilities 38,000 54,500 Notes payable (long term) 33,000 63,000 Total liabilities 71,000 117,500 Equity Common stock, $5 par value 226,000 163,000 Retained earnings 48,200 25,000 Total liabilities and equity $ 345,200 $ 305,500 IKIBAN INC. Income Statement For Year Ended June 30, 2019 Sales $ 693,000 Cost of goods sold 414,000 Gross profit 279,000 Operating expenses Depreciation expense $ 61,600 Other expenses 70,000 Total operating expenses 131,600 147,400 Other gains (losses) Gain on sale of equipment 2,300 Income before taxes 149,700 Income taxes expense 44,190 Net income $ 105,510 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 $60,600 cash. Received cash for the sale of equipment that had cost $51,600, yielding a $2,300 gain. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement. All purchases and sales of inventory are on credit. (1) Prepare a statement of cash flows using the indirect method for the year ended June 30, 2019. (Amounts to be deducted should be indicated with a minus sign.)

IKIBAN INC. Comparative Balance Sheets June 30, 2019 and 2018 2019 2018 Assets Cash $ 105,700 $ 47,000 Accounts receivable, net 69,500 54,000 Inventory 66,800 91,000 Prepaid expenses 4,700 6,000 Total current assets 246,700 198,000 Equipment 127,000 118,000 Accum. depreciation—Equipment (28,500 ) (10,500 ) Total assets $ 345,200 $ 305,500 Liabilities and Equity Accounts payable $ 28,000 $ 34,500 Wages payable 6,300 15,600 Income taxes payable 3,700 4,400 Total current liabilities 38,000 54,500 Notes payable (long term) 33,000 63,000 Total liabilities 71,000 117,500 Equity Common stock, $5 par value 226,000 163,000 Retained earnings 48,200 25,000 Total liabilities and equity $ 345,200 $ 305,500 IKIBAN INC. Income Statement For Year Ended June 30, 2019 Sales $ 693,000 Cost of goods sold 414,000 Gross profit 279,000 Operating expenses Depreciation expense $ 61,600 Other expenses 70,000 Total operating expenses 131,600 147,400 Other gains (losses) Gain on sale of equipment 2,300 Income before taxes 149,700 Income taxes expense 44,190 Net income $ 105,510 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 $60,600 cash. Received cash for the sale of equipment that had cost $51,600, yielding a $2,300 gain. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement. All purchases and sales of inventory are on credit. (1) Prepare a statement of cash flows using the indirect method for the year ended June 30, 2019. (Amounts to be deducted should be indicated with a minus sign.)

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter11: The Statement Of Cash Flows

Section: Chapter Questions

Problem 55PSB: Preparing a Statement of Cash Flows Volusia Company reported the following comparative balance...

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IKIBAN INC. Comparative Balance Sheets June 30, 2019 and 2018
	2019			2018
Assets
Cash	$	105,700			$	47,000
Accounts receivable, net		69,500				54,000
Inventory		66,800				91,000
Prepaid expenses		4,700				6,000
Total current assets		246,700				198,000
Equipment		127,000				118,000
Accum. depreciation—Equipment		(28,500	)			(10,500	)
Total assets	$	345,200			$	305,500
Liabilities and Equity
Accounts payable	$	28,000			$	34,500
Wages payable		6,300				15,600
Income taxes payable		3,700				4,400
Total current liabilities		38,000				54,500
Notes payable (long term)		33,000				63,000
Total liabilities		71,000				117,500
Equity
Common stock, $5 par value		226,000				163,000
Retained earnings		48,200				25,000
Total liabilities and equity	$	345,200			$	305,500

IKIBAN INC. Income Statement For Year Ended June 30, 2019
Sales			$	693,000
Cost of goods sold				414,000
Gross profit				279,000
Operating expenses
Depreciation expense	$	61,600
Other expenses		70,000
Total operating expenses				131,600
				147,400
Other gains (losses)
Gain on sale of equipment				2,300
Income before taxes				149,700
Income taxes expense				44,190
Net income			$	105,510

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 $60,600 cash.
Received cash for the sale of equipment that had cost $51,600, yielding a $2,300 gain.
Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.
All purchases and sales of inventory are on credit.

(1) Prepare a statement of cash flows using the indirect method for the year ended June 30, 2019. (Amounts to be deducted should be indicated with a minus sign.)

Required information
IKIBAN, INC.
Statement of Cash Flows (Indirect Method)
For Year Ended June 30, 2019
Cash flows from operating activities
Adjustments to reconcile net income to net cash provided by operating activities
Income statement items not affecting cash
Changes in current operating assets and liabilities

Required information
Cash flows from investing activities
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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