Question

Required information 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 $100,300 83,000 75,800 5,600 264, 700 136,000 (33,000) $367, 700 $ 56,000 63,000 104,500 7,800 231,300 127,000 (15,000) $343, 300 Cash Accounts receivable, net Inventory Prepaid expenses 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 $ 37,000 7,200 4,600 48,800 42,000 90,800 $ 48,000 17,400 6,200 71,600 72,000 143,600 244,000 32,900 $367,700 172,000 27,700 $343,300 IKIBAN INC. Income Statement For Year Ended June 30, 2019 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $70,600 Other expenses 179,000 Total operating expenses $738,000 |423,000 315,000 149,600 165, 400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 3,200 168,600 45,090 $123,510

Answer 1

Solution

Cash flow on total assets ratio
Operating Cash flow	/	Average Total Assets	=	Cash flow on total assets ratio
$     179,010.00		$     355,500.00	=	0.50

Working

IKIBAN INC.
Statement of Cash Flows (Partial)
For the Year ended June 30th 2017
A. Cash Flows from Operating Activity
Net Income		$    123,510.00
Adjustments to reconcile net income to net cash flows from Operating Activities
Income statement items not affecting cash
Depreciation expense	$           70,600.00
Gain on sale of Equipment	$           (3,200.00)
Cahnges In Current Operating Assets Liabilities
Increase in Accounts Receivable	$        (20,000.00)
Decrease in Inventory	$           28,700.00
Decrease in Prepaid Expenses	$             2,200.00
Decrease in Accounts Payable	$        (11,000.00)
Decrease in Wages Payable	$        (10,200.00)
Decrease in Income taxes payable	$           (1,600.00)
		$      55,500.00
Net cash flow from Operating activities		$    179,010.00