Exercise $12-12($Algo$)$ Indirect: Preparing statement of cash flows LO P$2,$ P$3,$ A$1$

Skip to question

$[$The following information applies to the questions displayed below.$]$

The following financial statements and additional information are reported.

IKIBAN INCORPORATED

Comparative Balance Sheets

At June $3020212020$

Assets

Cash $ $94,300$ $ $66,000$

Accounts receivable, net $98,00073,000$

Inventory $85,800119,500$

Prepaid expenses $6,6009,800$

Total current assets $284,700268,300$

Equipment $146,000137,000$

Accumulated depreciation$$Equipment $(38,000)(20,000)$

Total assets $ $392,700$ $ $385,300$

Liabilities and Equity

Accounts payable $ $47,000$ $ $63,000$

Wages payable $8,20019,400$

Income taxes payable $5,6008,200$

Total current liabilities $60,80090,600$

Notes payable $($long term$)52,00082,000$

Total liabilities $112,800172,600$

Equity

Common stock, $$5$ par value $264,000182,000$

Retained earnings $15,90030,700$

Total liabilities and equity $ $392,700$ $ $385,300$

IKIBAN INCORPORATED

Income Statement

For Year Ended June $30,2021$

Sales $ $788,000$

Cost of goods sold $433,000$

Gross profit $355,000$

Operating expenses $($excluding depreciation$)89,000$

Depreciation expense $80,600$

$185,400$

Other gains $($losses$)$

Gain on sale of equipment $4,200$

Income before taxes $189,600$

Income taxes expense $46,090$

Net income $ $143,510$

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 $$79,600$ cash.

Received cash for the sale of equipment that had cost $$70,600,$ yielding a $$4,200$ gain.

Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement.

All purchases and sales of inventory are on credit.

Exercise $12-12($Algo$)$ Part $1$

Required:

$(1)$ Prepare a statement of cash flows using the indirect method for the year ended June $30,2021.$

Note: Amounts to be deducted should be indicated with a minus sign.