Question

uiz A Saved Required information (The following information applies to the questions displayed below.) The following financial statements and additional information are reported. 2016 IKIBAN INC. Comparative Balance Sheets June 30, 2017 and 2016 2017 Assets Cash $100,900 Accounts receivable, net 81,500 Inventory 74,800 Prepaid expenses 5,500 Total current assets 262,700 Equipment 135,000 Accum. depreciation-Equipment (32,500) Total assets $365,200 Liabilities and Equity Accounts payable $ 36, oko Wages payable 7,100 Income taxes payable 4,500 Total current liabilities 47,600 Notes payable (long term) 41,000 Total liabilities 88,600 Equity Common stock, $5 par value 242,000 Retained earnings 34,600 Total liabilities and equity $365,200 $ 55,000 62,000 103,000 7.69 227,600 126,000 (14,500) $339, 100 $ 46,500 17.200 6,000 69, 700 71,000 140, 700 171,000 27,400 $339, 100 IKIBAN INC. Income Statement For Year Ended June 30, 2017 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $69,600 Other expenses 78,000 Total operating expenses $ 733,000 422,000 311,000 147.600

Answer 1

Answer -

Ikiban, Inc.
Statement of Cash Flows (Direct Method)
For Year Ended June 30, 2017
Cash flows from operating activities:
Cash received from customers	$713500
Cash paid for inventory purchases	-$404300
Cash paid for income taxes	-$46490
Cash paid for other expenses	-$86000
Net cash provided by operating activities		$176710
Cash flows from investing activities:
Cash proceeds from sale of equipment	$11100
Cash paid for new equipment	-$68600
Net cash used by investing activities		-$57500
Cash flows from financing activities:
Issuance of common stock	$71000
Cash paid to retire notes	-$30000
Payment of dividends	-$114310
Net cash used by financing activities		-$73310
Net increase (decrease) in cash		$45900
Cash balance at prior year end		$55000
Cash balance at current year end		$100900

Calculation:

1. Cash received from customers:

= Accounts receivable at prior year end + Sales - Accounts receivable at current year end

= $62000 + $733000 - $81500

= $713500

2. Cash paid for inventory purchases:

= Accounts payable at prior year end + Inventory at current year end + Cost of goods sold - Inventory at prior year end - Accounts payable at current year end

= $46500 + $74800 + $422000 - $103000 - $36000

= $404300

3. Cash paid for income taxes:

= Income taxes payable at prior year end + Income taxes expense - Income taxes payable at current year end

= $6000 + $44990 - $4500

= $46490

4. Cash paid for other expenses:

= Prepaid expenses at current year end + Wages payable at prior year end + Other expenses - Prepaid expenses at prior year end - Wages payable at current year end

= $5500 + $17200 + $78000 - $7600 - $7100

= $86000

5. Cash proceeds from sale of equipment:

As per given information,

Cost of sold equipment = $59600

Gain on sale of equipment = $3100

Now,

Accumulated depreciation on sold equipment:

= Accumulated depreciation at prior year end + Depreciation expense - Accumulated depreciation at current year end

= $14500 + $69600 - $32500

= $51600

Therefore,

Cash proceeds from sale of equipment:

= [Cost of sold equipment - Accumulated depreciation on sold equipment] + Gain on sale of equipment

= [$59600 - $51600] + $3100

= $11100

6. Issuance of common stock:

= Common stock at current year end - Common stock at prior year end

= $242000 - $171000

= $71000

7. Payment of dividends:

= Retained earnings at prior year end + Net income - Retained earnings at current year end

= $27400 + $121510 - $34600

= $114310

8. Net increase (decrease) in cash:

= Net cash provided by operating activities - Net cash used by investing activities - Net cash used by financing activities

= $176710 - $57500 - $73310

= $45900