Question

Prepare a statement of cash flows for the year ended June 30, 2017, using the indirect method

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, 2017
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

Answer 1