Question

Exercise 12-11 Indirect: Preparing statement of cash flows LO P1, P2, P3, A1 (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 $ 93,700 Accounts receivable, net 99,500 Inventory 86,800 Prepaid expenses 6,700 Total current assets 286,700 Equipment 147,000 Accum. depreciation Equipment (38,500) Total assets $395,200 Liabilities and Equity Accounts payable $ 48,000 Wages payable 8,300 Income taxes payable 5,700 Total current liabilities 62,000 Notes payable (long term) 53,000 Total liabilities 115,000 Equity Common stock, $5 par value 266,000 Retained earnings 14,200 Total liabilities and equity $395,200 $ 67,000 74,000 121,000 10,000 272,000 138,000 (20,500) $389,500 $ 64,500 19,600 8,400 92,500 83,000 175,500 183,000 31,000 $389,500

Answer 1

IKIBAN INC. statement of cash flows Indirect method) for the year ended June 30, 2017 cash flows from openating Activities Net Income S 145,510 Adjustment to reconcile net income to net cash provided by operating Activities: Income statement items not affecting cash Depreciation Expense Gain on sale of plant Assets. 4200 s 81600 change in cunent operating Assets e liabilites - Increase in accounts receivable Decrease in inventory Decrease in prepaid expense Decrease in accounts payable Decrease in wages payable Decrease i Income Tax payable - 25500 34200 3300 165oo 11300 - 2700 $ 204.3 10 Het cash provided by operating Activities: cash flows from investing Activites: - cash received from sale of equipment - cash paid for eauipment 12300 80,600 68300 Netcash used in Investing activities! cash flows from financing Activities - cash received from STOCK issuance cash paid to retire bonds. cash paid for Du Net cash used in financing Activities cos Net Increase (decreased in cash cash balance at prior year-End cash balance at curent year End 83000 30928 162310 - 109310 26700 67000 F 93 100

cash receipt from equipment sold: Accumulated Depreciation BG) 613012016 $ 20500 sale Dep expense 8160 ouen 20 SOO + 81600-38 500) 63600 BO) 613012017 38 500 COST OF Equipment sold given) Less: Accumulated Dep. of equip sola BOOK value of equipment Sold Add: orain on sale of equipment cash receipt from sale of equipment. $ 71600 (636005 S 8000 1:4300 $12300 Stock Issuance. $ 266000 - $183000 83000 (3) Dividend : Retained Eaining CBeglt Nerncome - Retaj san $ 31000 + 145510 $162310