The following financial statements and additional information are reported. IKIBAN INCORPORATED Comparative Balance Sheets At June 30 2021 2020 Assets Cash $ 92,500 $ 69,000 Accounts receivable, net 102,500 76,000 Inventory 88,800 124,000 Prepaid expenses 6,900 10,400 Total current assets 290,700 279,400 Equipment 149,000 140,000 Accumulated depreciation—Equipment (39,500) (21,500) Total assets $ 400,200 $ 397,900 Liabilities and Equity Accounts payable $ 50,000 $ 67,500 Wages payable 8,500 20,000 Income taxes payable 5,900 8,800 Total current liabilities 64,400 96,300 Notes payable (long term) 55,000 85,000 Total liabilities 119,400 181,300 Equity Common stock, $5 par value 270,000 185,000 Retained earnings 10,800 31,600 Total liabilities and equity $ 400,200 $ 397,900 IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 Sales $ 803,000 Cost of goods sold 436,000 Gross profit 367,000 Operating expenses (excluding depreciation) 92,000 Depreciation expense 83,600 191,400 Other gains (losses) Gain on sale of equipment 4,500 Income before taxes 195,900 Income taxes expense 46,390 Net income $ 149,510 Additional Information A $30,000 notes 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 $82,600 cash. Received cash for the sale of equipment that had cost $73,600, yielding a $4,500 gain. Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement. All purchases and sales of inventory are on credit. Prepare a statement of cash flows using the indirect method for the year ended June 30, 2021.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

The following financial statements and additional information are reported.

IKIBAN INCORPORATED
Comparative Balance Sheets
At June 30	2021	2020
Assets
Cash	$ 92,500	$ 69,000
Accounts receivable, net	102,500	76,000
Inventory	88,800	124,000
Prepaid expenses	6,900	10,400
Total current assets	290,700	279,400
Equipment	149,000	140,000
Accumulated depreciation—Equipment	(39,500)	(21,500)
Total assets	$ 400,200	$ 397,900
Liabilities and Equity
Accounts payable	$ 50,000	$ 67,500
Wages payable	8,500	20,000
Income taxes payable	5,900	8,800
Total current liabilities	64,400	96,300
Notes payable (long term)	55,000	85,000
Total liabilities	119,400	181,300
Equity
Common stock, $5 par value	270,000	185,000
Retained earnings	10,800	31,600
Total liabilities and equity	$ 400,200	$ 397,900

IKIBAN INCORPORATED
Income Statement
For Year Ended June 30, 2021
Sales	$ 803,000
Cost of goods sold	436,000
Gross profit	367,000
Operating expenses (excluding depreciation)	92,000
Depreciation expense	83,600
	191,400
Other gains (losses)
Gain on sale of equipment	4,500
Income before taxes	195,900
Income taxes expense	46,390
Net income	$ 149,510

Additional Information

A $30,000 notes 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 $82,600 cash.
Received cash for the sale of equipment that had cost $73,600, yielding a $4,500 gain.
Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement.
All purchases and sales of inventory are on credit.

Prepare a statement of cash flows using the indirect method for the year ended June 30, 2021.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions