Question

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Saved (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 $ 105,100 Accounts receivable, net 71,000 Inventory 67,800 Prepaid expenses 4,800 Total current assets 248,700 Equipment 128,000 Accum. depreciation-Equi (29,000) Total assets $347,700 Liabilities and Equity Accounts payable $ 29,000 Wages payable 6,400 Income taxes payable 3,800 Total current liabilities 39,200 Notes payable (long term) 34,000 Total liabilities 73,200 Equity Common stock, $5 par value 228,000 Retained earnings 46,500 Total liabilities and equity 7,700 $ 48,000 55,000 92,500 6,200 201,700 119,000 (11,000) $309,700 $ 36,000 15,800 4,600 56,400 64,000 120,400 16.000 25,300 $309,700 IKIBAN INC. Income Statement For Year Ended June 30, 2017 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $62,600 Other expenses 71,000 Total operating expenses $698,000 415,000 283,000 133,600 149, 400 other gains (losses)

Answer 1

Amount ($) IKIBAN INC. Cash Flow Statement for the Year Ending 30 June, 2017 Direct Method Particulars Cash Flow From Operating Activities * Cash Received From Sales ( W Note 1) Less : Cash paid for Purchases ( W Note 3) . Less Cash paid for other Expenses (W Note 5) o Less : Income Tax Paid (W Note 4) 1 Net Cash Flow From Operating Activities (A) 682,000 (397,300) (79,000) (45,090) 160,610 3 Cash Flow From Investing Activities 4 Cash received from sale of Equipment (W note 7) 5 Purchase of Equipment (W note 7) 6 Net Cash Flow From Investing Activities (B) 10,400 (61,600) (51,200) 3 Cash Flow From Financing Activities 9 Cash received from the issue of common stock 0 Cash paid on retirement of note payable (Long term ) 1 Dividend Paid ( W Note 6) 2 Net Cash Flow From Financing Activities (C) 64,000 (30,000) (86,310) (52,310) 4 Net Cash Flows from All Activities (A+B+C) 5 Cash and cash equivalents as on June 30,2016 6 Cash and cash equivalents as on June 30,2017 57,100 48,000 105,100

O Working Note 1 1 Calculation of Cash Received from Sales 2 Account Receivable (Beginning) 3 Add : Sales during the Year 4 Total 5 Less : Accounts Receivable (Ending) 6 Cash Received From Sales 55,000 698,000 753,000 (71,000) 682,000 8 Working Note 2 9 Calculation of Total Purchases 0 Inventory (Ending) +1 Add: Cost of goods sold +2 Total 13 Less : Inventory (Beginning) 14 Purchases During the period 67,800 415,000 482,800 (92,500) 390,300 +7 Working Note 3 8 Calculation of Cash paid for Purchases 19 Account Payable (Begining) 0 Add : Purchases during the period (W note 2) -1 Total -2 Less : Account Payable (Ending) 3 Cash paid for Purchases 36,000 390,300 426,300 (29,000) 397,300

5 Working Note 4 5 Calculation of Income Tax Paid 7 Income Tax Payable (Opening Bal.) 3 Add : Provision for Income Tax Total Less : Income Tax Payable (Closing Bal.) 1 Income Tax Paid During the Year 4,600 44,290 48,890 (3,800) 45,090 2 4 Working Note 5 5 Calculation of Cash paid for other expenses 5 Prepaid expenses (Closing balance) Add: Wages payable (opening balance) 3 Add: Other expenses for the year Total Less: Wages Payable (Ending balance) 1 Less: Prepaid expense (Opening balance ) 2 Cash paid for other expenses 4,800 15,800 71,000 91,600 (6,400) (6,200) 79,000 4 Working Note 6 5 Calculation of Dividend Paid 7 Retained Earnings (Beginning) 3 Add: Net Income Total Less : Retained Earnings (Ending) 1 Dividend Paid During the Year 25,300 107,510 132,810 (46,500) 86,310

34 Working Note 7 35 Calculation of cash received on the sale of Equipment 37 Accumulated Depreciation (Beginning Bal.) 38 Add: Depreciation expense (P&L) 39 Total 20 Less : Accumulated Dep. (Ending Bal.) 21 Depreciation Amount transferred to Equipment A/c 11,000 62,600 73,600 (29,000) 44,600 33 Equipment A/c (Beginning Bal.) 34 Add: Purchase of new Equipment 25 Add: Gain on the sale of Equipment 36 Total 97 Less: Equipment A/c (Ending Bal.) 38 Less : Amount Transferred from Acc. Depreciation A/C 29 Cash received on the sale of Equipment 119,000 61,600 2,400 183,000 (128,000) (44,600) 10,400