Question

Exercise 12-17B Direct: Preparing statement of cash flows LO P5 The following financial statements and additional information are reported. 2018 IKIBAN INC. Comparative Balance Sheets June 30, 2019 and 2018 2019 Assets Cash $ 82,100 Accounts receivable, net 78,500 Inventory 72,800 Prepaid expenses 5,300 Total current assets 238,700 Equipment 133,000 Accum. depreciation-Equipment (31,500) Total assets $340,200 Liabilities and Equity Accounts payable $ 34,000 Wages payable 6,900 Income taxes payable 4,300 Total current liabilities 45,200 Notes payable (long term) 31,800 Total liabilities 77,000 Equity Common stock, $5 par value 238,000 Retained earnings 25,200 Total liabilities and equity $340,200 $ 53,000 60,000 100,000 7,200 220,200 124,000 (13,500) $330,700 $ 43,500 16,800 5,600 65,900 69,000 134,900 OVU 169,000 26,800 $330,700

Answer 1

IKIBAN , INC.
Statement of cash Flows (Direct Method )
For the year ended June 30,2019
cash flow from operating activities:
Cash received from customers (Note 1 )	$ 704,500
cash paid for inventory (Note 2 )	($ 402,300)
cash paid for operating expense(Note 3 )	($84,000)
cash paid for income taxes (Note 4 )	($46,090)
Net cash provided by operating activities		$ 172,110
cash flow from investing activities:
Cash paid for equipment	($ 66,600)
cash received sale of equipment (Note 5 )	$ 10,900
Net cash used in investing activities		($ 55,700)
cash flow from financing activities:
cash received from stock issuance (238,000-169,000)	$ 69,000
cash paid for retire notes	($ 37,200)
cash paid for dividends (Note 6 )	($ 119,110)
Net cash used in Financing activities		($87,310)
Net increase (decrease) in cash		$ 29,100
cash balance at prior year end		$ 53,000
cash balance at Current year end		$ 82,100

ALL EXPLANATION IS GIVEN BELOW :

Note 1 :
Accounts receivable
Beg.Bal	$ 60,000
Sales	$ 723,000	Cash	$ 704,500
		(Bal. in Fig )
End.Bal.	$ 78,500
Note 2 :
Accounts payable
		Beg.Bal	$ 43,500
Cash	$ 402,300	Purchase	$ 392,800
(Bal. in Fig )		(see below )
		End.Bal.	$ 34,000
To calculate the purchase of inventory :
Cost of goods old = Beginning inventory + purchase - Ending Inventory
Purchase = cost of goods sold + Ending inventory - Beginning inventory
Purchase = $ 420,000 +$ 72,800 -$ 100,000
Purchase of inventory = $ 392,800
Note 3 :
other expenses
Beg.Bal	$ 7,200	Beg.Bal	$ 16,800
Cash	$ 84,000	Other expense	$ 76,000
(Bal. in Fig )		(income statement)
End.Bal.	$ 5,300	End.Bal.	$ 6,900
Note 4 :
Income tax
		Beg.Bal	$ 5,600
Cash	$ 46,090	Income tax	$ 44,790
(Bal. in Fig )		(income statement)
		End.Bal.	$ 4,300

Note 5 :
Equipment
Beg.Bal	$ 124,000
Bank (purchase)	$ 66,600	Bank(sale)	$ 57,600
End.Bal.	$ 133,000
Accumulated Depreciation
		Beg.Bal	$ 13,500
Accumulated depreciation	$ 49,600	Depreciation	$ 67,600
(Bal. in Fig )		(income statement)
		End.Bal.	$ 31,500
Cost	$ 57,600
less: Accumulated depreciation	($49,600)
Book value	$ 8000
Add: Gain on sale of equipment	$ 2,900
Cash received from sale	$ 10,900
Note 6 :
Retained earnings
		Beg.Bal	$ 26,800
Dividend paid	$ 119,110	Net income	$ 117,510
(Bal. in Fig )		(income statement)
		End.Bal.	$ 25,200