The following financial statements and additional information are reported. IKIBAN INCORPORATED Comparative Balance Sheets At June...
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The following financial statements and additional information are reported. IKIBAN INCORPORATED Comparative Balance Sheets At June 30 2021 2020 Assets Cash $ 95,500 $ 64,000 Accounts receivable, net 95,000 Inventory 83,800 71,000 116,500 Prepaid expenses 6,400 9,400 Total current assets 280,700 260,900 144,000 135,000 Equipment Accumulated depreciation-Equipment Total assets $ 387,700 (37,000) (19,000) $ 376,900 Liabilities and Equity Accounts payable $ 45,000 $ 60,000 Wages payable 8,000 19,000 Income taxes payable 5,400 7,800 Total current liabilities 58,400 86,800 Notes payable (long term) Total liabilities 50,000 80,000 108,400 166,800 Equity Common stock, $5 par value 260,000 180,000 Retained earnings 19,300 30,100 Total liabilities and equity $ 387,700 $ 376,900 IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 Sales Cost of goods sold $ 778,000 431,000 347,000 87,000 Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 78,600 181,400 4,000 185,400 45,890 $ 139,510 Additional Information a. A $30,000 notes 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 $77,600 cash. d. Received cash for the sale of equipment that had cost $68,600, yielding a $4,000 gain. e. Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement. f. All purchases and sales of inventory are on credit. Required: (1) Prepare a statement of cash flows using the indirect method for the year ended June 30, 2021. (Amounts to be deducted should be indicated with a minus sign.) Cash flows from operating activities IKIBAN, INCORPORATED Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2021 Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Changes in current operating assets and liabilities Cash flows from investing activities $ 0 Cash flows from financing activities Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end 0 $ 0 $ 0 The following financial statements and additional information are reported. IKIBAN INCORPORATED Comparative Balance Sheets At June 30 2021 2020 Assets Cash $ 95,500 $ 64,000 Accounts receivable, net 95,000 Inventory 83,800 71,000 116,500 Prepaid expenses 6,400 9,400 Total current assets 280,700 260,900 144,000 135,000 Equipment Accumulated depreciation-Equipment Total assets $ 387,700 (37,000) (19,000) $ 376,900 Liabilities and Equity Accounts payable $ 45,000 $ 60,000 Wages payable 8,000 19,000 Income taxes payable 5,400 7,800 Total current liabilities 58,400 86,800 Notes payable (long term) Total liabilities 50,000 80,000 108,400 166,800 Equity Common stock, $5 par value 260,000 180,000 Retained earnings 19,300 30,100 Total liabilities and equity $ 387,700 $ 376,900 IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 Sales Cost of goods sold $ 778,000 431,000 347,000 87,000 Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 78,600 181,400 4,000 185,400 45,890 $ 139,510 Additional Information a. A $30,000 notes 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 $77,600 cash. d. Received cash for the sale of equipment that had cost $68,600, yielding a $4,000 gain. e. Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement. f. All purchases and sales of inventory are on credit. Required: (1) Prepare a statement of cash flows using the indirect method for the year ended June 30, 2021. (Amounts to be deducted should be indicated with a minus sign.) Cash flows from operating activities IKIBAN, INCORPORATED Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2021 Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Changes in current operating assets and liabilities Cash flows from investing activities $ 0 Cash flows from financing activities Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end 0 $ 0 $ 0
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