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, 2015 and 2014 2015 2014 Assets Cash $ 115,400 $ 62,700 Accounts receivable, net 69,400 51,300 Inventory 66,100 96,700 Prepaid expenses 4,800 5,600 Total current assets 255,700 216,300 Equipment 127,500 117,000 Accum. depreciation—Equipment (28,200 ) (10,100 ) Total assets $ 355,000 $ 323,200 Liabilities and Equity Accounts payable $ 26,200 $ 32,500 Wages payable 7,900 16,300 Income taxes payable 2,600 3,900 Total current liabilities 36,700 52,700 Notes payable (long term) 53,000 76,000 Total liabilities 89,700 128,700 Equity Common stock, $5 par value 240,000 187,000 Retained earnings 25,300 7,500 Total liabilities and equity $ 355,000 $ 323,200 IKIBAN INC. Income Statement For Year Ended June 30, 2015 Sales $ 675,000 Cost of goods sold 409,000 Gross profit 266,000 Operating expenses Depreciation expense $ 57,900 Other expenses 66,400 Total operating expenses 124,300 141,700 Other gains (losses) Gain on sale of equipment 2,700 Income before taxes 144,400 Income taxes expense 57,760 Net income $ 86,640 Additional Information a. A $23,000 note payable is retired at its $23,000 carrying (book) value in exchange for cash. b. The only changes affecting retained earnings are net income and cash dividends paid. c. New equipment is acquired for $59,700 cash. d. Received cash for the sale of equipment that had cost $49,200, yielding a $2,700 gain. e. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement. f. All purchases and sales of inventory are on credit. rev: 03_09_2016_QC_CS-44693 14.value: 3.57 pointsRequired information Required: (1) Prepare a statement of cash flows for the year ended June 30, 2015, using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

Answer 1