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 Assets Cash $96,100 93,500 82,800 6,300 278,700 143,eee (36,500) . $385 , 200 $ 63,800 70,000 Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Votal assets Liabilities and Equity Accounts payable Wages payabie Incomé taxes payable Total current liabilities 115,000 9,200 257,200 134,000 (18,500) $372,700 $58,500 18,800 7,600 84,900 79,000 163,900 44,ee0 7,900 5,300 57,200 49,eee 106,200 Notes payable (long term) Total liabilities Equity Common stock, $5 par value Retained earnings 58 eee /21,eee $385,200 179,000 29,800 $372,780 Total liabilities and equity IKIBAN INC Income Statement For Year Ended June 30, 2019 $773,000 43е, ере 343, ееe Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $77,600 86,000 Other expenses

Answer 1

Solution

IKIBAN INC.
Statement of Cash Flows
For the Year ended June 30th 2017
A. Cash Flows from Operating Activity
Net Income		$    137,510.00
Adjustments to reconcile net income to net cash flows from Operating Activities
Income statement items not affecting cash
Depreciation expense	$           77,600.00
Gain on sale of Equipment	$           (3,900.00)
Cahnges In Current Operating Assets Liabilities
Increase in Accounts Receivable	$        (23,500.00)
Decrease in Inventory	$           32,200.00
Decrease in Prepaid Expenses	$             2,900.00
Decrease in Accounts Payable	$        (14,500.00)
Decrease in Wages Payable	$        (10,900.00)
Decrease in Income taxes payable	$           (2,300.00)
		$      57,600.00
Net cash flow from Operating activities		$    195,110.00
B. Cash flows from Investing Activities
Cash paid for Equipment	$        (76,600.00)
Cash received from Sale Of Equipment	$           11,900.00
Net Cash Used in Investing activities		$    (64,700.00)
C. Cash Flows from Financing activities
Cash paid to retire notes	$        (30,000.00)
Cash received from stock issuance	$           79,000.00
Cash paid for Dividends	$      (146,310.00)
Cash flows from Financing activities		$    (97,310.00)
Net Increase (Decrease) in Cash [A+B+C]		$      33,100.00
Cash balance at prior Year-end		$      63,000.00
Cash balance at Current Year-end		$      96,100.00

Working

Accumulated depreciation on equipment sold
Accumulated Depreciation beginning balance	$       18,500.00
Add: Depreciation of current year	$       77,600.00
Subtotal	$       96,100.00
Ending balance of Accumulated depreciation	$       36,500.00
Depreciation on asset sold	$       59,600.00

.

Cash received on sale of Equipment
Cost of equipment sold	$       67,600.00
Less: Accumulated depreciation	$       59,600.00
Book value of asset sold	$         8,000.00
Profit on sale	$         3,900.00
Cash received on sale of equipment	$       11,900.00

.

Calculation of dividend paid
Beginning balance of retained earnings	$       29,800.00
Add: Net income	$    137,510.00
	$    167,310.00
Less: Ending balance of Retained earnings	$       21,000.00
Dividends paid in cash	$    146,310.00