Question

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The following financial statements and additional information are reported.

IKIBAN INC. Comparative Balance Sheets June 30, 2017 and 2016
	2017				2016
Assets
Cash	$	103,300			$	51,000
Accounts receivable, net		75,500				58,000
Inventory		70,800				97,000
Prepaid expenses		5,100				6,800
Total current assets		254,700				212,800
Equipment		131,000				122,000
Accum. depreciation—Equipment		(30,500	)			(12,500	)
Total assets	$	355,200			$	322,300
Liabilities and Equity
Accounts payable	$	32,000			$	40,500
Wages payable		6,700				16,400
Income taxes payable		4,100				5,200
Total current liabilities		42,800				62,100
Notes payable (long term)		37,000				67,000
Total liabilities		79,800				129,100
Equity
Common stock, $5 par value		234,000				167,000
Retained earnings		41,400				26,200
Total liabilities and equity	$	355,200			$	322,300

  

IKIBAN INC. Income Statement For Year Ended June 30, 2017
Sales				$	713,000
Cost of goods sold					418,000
Gross profit					295,000
Operating expenses
Depreciation expense	$	65,600
Other expenses		74,000
Total operating expenses					139,600
					155,400
Other gains (losses)
Gain on sale of equipment					2,700
Income before taxes					158,100
Income taxes expense					44,590
Net income				$	113,510

Additional Information

1. A $30,000 note payable is retired at its $30,000 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 $64,600 cash.
4. Received cash for the sale of equipment that had cost $55,600, yielding a $2,700 gain.
5. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.
6. All purchases and sales of inventory are on credit.

rev: 12_05_2017_QC_CS-111198Using the direct method, prepare the statement of cash flows for the year ended June 30, 2017. (Amounts to be deducted should be indicated with a minus sign.)

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Answer 1