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 $ 93,100 101,000 87,800 6,800 288,700 148,000 (39,000) $397,700 $ 68,000 75,000 122,500 10,200 275,700 139,000 (21,000) $393,700 Assets 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 $ 49,000 8,400 5,800 63,200 54,000 117,200 $ 66,000 19,800 8,600 94,400 84,000 178,400 268,000 12,500 $397,700 184,000 31,300 $393,700 IKIBAN INC. Income Statement For Year Ended June 30, 2019 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $82,600 Other expenses 91,000 Total operating expenses $ 798,000 435,000 363,000 173,600 189,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 4,400 193,800 46,290 $147,510

Answer 1

$ 147,510 $ $ 82,600 (4,400) IKIBAN INC Statement of Cash Flows (Indirect Method) For year Ended June 30,2019 Cash flows from operating activities Net Income Addustments to reconcile net income to net cash flow from operating activities Income statement items not effecting cash Depreciation Gain on Sale of Investment Changes in Current operating assets and liabilities Increase in accounts receivables Decrease in Inventory Decrease in Prepaid Expenses Decrease in Accounts payable Decrease in Wages payable Decrease in Income Tax payable Net cash flow From operating activities Cash flows from investing activities: Cash from sale of Equipment Cash used for purchase of equipment Net cash flow from investing activities S $ $ S S S (26,000) 34.700 3,400 (17,000) (11,400) (2.800) S 206,610 S S 12,400 (81.600) $ (69.200)

S (166,310) S (30,000) $ 84,000 Cash flows from Financing activities: Cash paid for dividends Repayment of Notes payable Cash from sale of common stock Net cash flow from financing activities Increase in cash Cash balance at prior year end Cash balance at current year end S (112,310) $ 25,100 S 68.000 $ 93,100 Working Notes: Cash from sale of Equipment Gross Value of Equipment Less: Depreciation of sale of Equipment ($82600+$21000-$39000) Net cost of Equipment Add: Gain on sale of Equipment S S $ S S 72.600 64.600 8,000 4.400 12,400 Cash paid for dividends Opening balance of Retained earnings Add: Net Income $ $ $ $ $ 31,300 147,510 178.810 12,500 166,310 Less: closing balance of Retained earnings