Required information Exercise 16-11 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. Compar ative Balance Sheets June 30, 2017 and 2016 2017 2016 Assets Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accum depreciation-Equipment Total assets $ 83, 300 75, 500 70, 800 5, 100 234, 700 131, 000 (30, 500) 335, 200 $51, 000 58, 000 97, 000 6, 800 212, 800 122, 000 (12, 500) 322, 300 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 eamings Total liabilities and equity $32, 000 6, 700 4, 100 42, 800 37, 000 79, 800 $40, 500 16, 400 5, 200 62, 100 67, 000 129, 100 234, 000 21, 400 335, 200 167, 000 26, 200 322, 300 IKIBAN INC. Income Statement For Year Ended June 30, 2017 Sales Cost of goods sold Gross profit Operating expenses 713, 000 418, 000 295, 000 $65, 600 74, 000 Depreciation expense Other expenses Total operating expenses 139, 600 155, 400 0ther gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 2, 700 158, 100 44, 590 $113, 510 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 $64,600 cash. d. Received cash for the sale of equipment that had cost $55,600, yielding a $2,700 gain e. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement. f. All purchases and sales of inventory are on credit. Exercise 16-11 Part 1 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.) IKIBAN, INC Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2017 Cash flows from operating activities Net income Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Depreciation expense Gain on sale of plant assets $ 113,510 65,600 (2,700) Changes in current operating assets and liabilities Increase in accounts receivable Decrease in inventory Decrease in prepaid expenses Decrease in accounts payable Decrease in wages payable Decrease in income taxes payable (17,500) 26,200 1,700 (8,500) (9,700) (1,100) Net cash provided by operating activities Cash flows from investing activities S 167,510 Cash received from sale of equipment Cash paid for equipment Net cash used in investing activities Cash flows from financing activities Cash received from stock issuance Cash paid to retire notes Cash paid for dividends Net cash used in financing activities Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end S 167,510 S 167,510