GL1201 - Based on Exercise 12-11 LO P1, P2, P3, A1

Additional Information

1. A $45,000 note payable is retired at its $45,000 carrying (book) value in exchange for cash.
2. The only changes affecting retained earnings are net income and cash dividends paid.
3. New equipment is acquired for $70,000 cash.
4. Received cash for the sale of equipment that had cost $58,000, yielding a $3,900 gain.
5. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.
6. All purchases and sales of inventory are on credit.

Exercise 12-11 Indirect: Preparing statement of cash flows LO P1, P2, P3, A1 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, 2017 and 2016 2017 2016 Assets Cash Accounts receivable, net Inventory Prepaid expense:s Total current assets Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Accounts payable Wages payable Income taxes payable Total current liabilities Notes payable (long term) Total liabilities Equity Common stock, $5 par value Retained earnings Total liabilities and equity $106,300 $46,000 53,000 89,500 5,800 244,700 194, 300 126,000 117,000 10,000 $342,700 $301,300 68,000 65,800 4,600 28,000 $ 27,000 33,000 15,400 4,200 52,600 62,000 68,800 114,600 6,200 3,600 36,800 32,000 224,000 162,000 24,700 $342,700 $301,300 49,900 IKIBAN INC. Income Statement For Year Ended June 30, 2017 $688,000 413,000 275,000 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $60,600 69,000 Other expenses Total operating expenses 129,600 145,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 2,200 147,600 44,090 $103,510 x Answer is not complete General ournal General Ledger Indirect Method Requirement Trial Balance Direct Method Using the income statement, the comparative balance sheet, and the additional information given above, reconstruct the entries for the summarized activity of the current fiscal year. Upon completion, the trial balance tab should agree with the June 30, 2017 balances Account Title Date Debit Credit 0 Jun 30 No journal entry required Jun 30 No journal entry required Jun 30 No journal entry required Jun 30 No journal entry required Jun 30 No journal entry required Jun 30 No journal entry required 45,000 Jun 30 Notes payable (short-term) Cash 45,000 Equipment Cash 12 Jun 30 70,000 70,000 18,900 Jun 30 Cash Accumulated depreciation - Equipment 43,000 58,000 3,900 3,900 Equipment Gain on sale of equipment Journal entry worksheet Journal entry worksheet 13 Reconstruct the journal entry for income taxes expense, incorporating the change in the related balance sheet account(s), if any. Reconstruct the journal entry for the sale of equipment at a gain, incorporating the change in the related balance sheet account(s), if any. Note: Enter debits before credits. Note: Enter debits before credits. Debit Credit Date Account Title Date Debit Jun 30 journal entry required Jun 30 journal entry required Journal entry worksheet Journal entry worksheet Reconstruct the journal entry for depreciation expense, incorporating the change in the related balance sheet account(s), if any. Reconstruct the journal entry for cash paid for operating expenses, incorporating the change in the related balance sheet account(s), if any Note: Enter debits before credits Note: Enter debits before credits. Debit Credit Debit Credit Date Account Title Date Account Title Jun 30 o journal entry required Jun 30 journal entry required Journal entry worksheet Journal entry worksheet Reconstruct the journal entry for cash receipts from customers, i the change in the related balance sheet account(s), if any. Reconstruct the journal entry for cash payments for inventory, incorporating the change in the related balance sheet account(s), if any. Note: Enter debits before credits Note: Enter debits before credits. Debit Credit Date Account Title Debit Credit Date Account Title Jun 30 journal entry required Jun 30 joumal entry required Journal entry worksheet Journal entry worksheet 6 75 Close Income Summary to Retained Earnings. Reconstruct the entry for the purchase of new equipment. Note: Enber debits before credis. Note: Enter debits before credits Jun 30 Equipment 0,000 Cash 70 Date Account Title Debit Jun 30 ournal entry worksheet 10 11 Journal entry worksheet Close all expense accounts to income summary Note: Enter debits before credis. Reconstruct the entry to record the retirement of the $45,000 note payable at its $45,000 carrying (book) value in exchange for cash. un 30 Note: Enter debits before credits. Date Debit Jun 30 payable (short-term Cash 45,000 45,000 Journal entry worksheet . 89 103 Close all revenue and gain accounts to income summary