The following financial statements and additional information are reported. IKIBAN INC. Comparative Balance Sheets June 30, 2017
Question:
The following financial statements and additional information are reported.
IKIBAN INC. Comparative Balance Sheets June 30, 2017 and 2016 | ||||||||
2017 | 2016 | |||||||
Assets | ||||||||
Cash | $ | 101,500 | $ | 54,000 | ||||
Accounts receivable, net | 80,000 | 61,000 | ||||||
Inventory | 73,800 | 101,500 | ||||||
Prepaid expenses | 5,400 | 7,400 | ||||||
Total current assets | 260,700 | 223,900 | ||||||
Equipment | 134,000 | 125,000 | ||||||
Accum. depreciation?Equipment | (32,000 | ) | (14,000 | ) | ||||
Total assets | $ | 362,700 | $ | 334,900 | ||||
Liabilities and Equity | ||||||||
Accounts payable | $ | 35,000 | $ | 45,000 | ||||
Wages payable | 7,000 | 17,000 | ||||||
Income taxes payable | 4,400 | 5,800 | ||||||
Total current liabilities | 46,400 | 67,800 | ||||||
Notes payable (long term) | 40,000 | 70,000 | ||||||
Total liabilities | 86,400 | 137,800 | ||||||
Equity | ||||||||
Common stock, $5 par value | 240,000 | 170,000 | ||||||
Retained earnings | 36,300 | 27,100 | ||||||
Total liabilities and equity | $ | 362,700 | $ | 334,900 | ||||
The following financial statements and additional information are reported.
Additional Information a. A $30,000 note payable is retired at its $30,000 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 $67,600 cash.
d. Received cash for the sale of equipment that had cost $58,600, yielding a $3,000 gain. a Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement. f. All purchases and sales of inventory are on credit.
Required:
(1) Prepare a statement of cash flows for the year ended June 30, 2017, using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)
Fundamental accounting principle
ISBN: 978-0078025587
21st edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta