Required information [The following information applies to the questions displayed below.] The following financial statements and additional
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[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, 2019 and 2018 | ||||||||
2019 | 2018 | |||||||
Assets | ||||||||
Cash | $ | 87,500 | $ | 44,000 | ||||
Accounts receivable, net | 65,000 | 51,000 | ||||||
Inventory | 63,800 | 86,500 | ||||||
Prepaid expenses | 4,400 | 5,400 | ||||||
Total current assets | 220,700 | 186,900 | ||||||
Equipment | 124,000 | 115,000 | ||||||
Accum. depreciation—Equipment | (27,000 | ) | (9,000 | ) | ||||
Total assets | $ | 317,700 | $ | 292,900 | ||||
Liabilities and Equity | ||||||||
Accounts payable | $ | 25,000 | $ | 30,000 | ||||
Wages payable | 6,000 | 15,000 | ||||||
Income taxes payable | 3,400 | 3,800 | ||||||
Total current liabilities | 34,400 | 48,800 | ||||||
Notes payable (long term) | 30,000 | 60,000 | ||||||
Total liabilities | 64,400 | 108,800 | ||||||
Equity | ||||||||
Common stock, $5 par value | 220,000 | 160,000 | ||||||
Retained earnings | 33,300 | 24,100 | ||||||
Total liabilities and equity | $ | 317,700 | $ | 292,900 | ||||
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IKIBAN INC. Income Statement For Year Ended June 30, 2019 | ||||||
Sales | $ | 678,000 | ||||
Cost of goods sold | 411,000 | |||||
Gross profit | 267,000 | |||||
Operating expenses | ||||||
Depreciation expense | $ | 58,600 | ||||
Other expenses | 67,000 | |||||
Total operating expenses | 125,600 | |||||
141,400 | ||||||
Other gains (losses) | ||||||
Gain on sale of equipment | 2,000 | |||||
Income before taxes | 143,400 | |||||
Income taxes expense | 43,890 | |||||
Net income | $ | 99,510 | ||||
|
Additional Information
- A $30,000 note 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 $57,600 cash.
- Received cash for the sale of equipment that had cost $48,600, yielding a $2,000 gain.
- Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.
- All purchases and sales of inventory are on credit.
(2) Compute the company’s cash flow on total assets ratio for its fiscal year 2019.
Related Book For
Fundamental Managerial Accounting Concepts
ISBN: 978-0078025655
7th edition
Authors: Thomas Edmonds, Christopher Edmonds, Bor-Yi Tsay, Philip Old
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