Question

2016 Part 3 of 3 IKIBAN INC. Comparative Balance Sheets June 30, 2017 and 2016 2017 Assets Cash $ 96,100 Accounts receivable, net 93,500 Inventory 82,800 Prepaid expenses 6,300 Total current assets 278, 700 Equipment 143,000 Accum. depreciation-Equipment (36,500) Total assets $385,200 Liabilities and Equity Accounts payable $ 44,000 Wages payable 7,900 Income taxes payable 5,300 Total current liabilities 57,200 Notes payable (long term) 49,000 Total liabilities 106,200 Equity Common stock, $5 par value 258,000 Retained earnings 21,000 Total liabilities and equity $385,200 $ 63,000 70,000 115,000 9,200 257,200 134,000 (18,500) $ 372,700 3.35 points $ 58,500 18,800 7,600 84,900 79,000 163,900 179,000 29,800 $372,700 IKIBAN INC. Income Statement For Year Ended June 30, 2017 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $ 77,600 Other expenses 86,000 Total operating expenses $773,000 430,000 343,000 163,600 179,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 3,900 183,300 45,790 $137,510

Answer 1

Ikiban Inc Cashflow Statement Calculation 749,500 Cash flows from from Operating Activities Cash collections from customers Cash payments Cash paid to suppliers for Inventory Cash paid for operating other expenses Cash paid for Income Taxes Total cash payments Net Cash Provided/(Used) by Operating Activities 412,300 94,000 48,090 554,390 195, 110 Cash flows from from Investing Activities Proceeds from sale of equipment Purchase of Equipment Net Cash Provided/(Used) by Investing Activities 11,900 As per below wkgs (76,600) (64,700) Cash flows from from Financing Activities Repayment of Notes Proceeds from issue of common stock Dividends paid Net Cash Provided/(Used) by Financing Activities (30,000) 79,000 =258,000-179,000 (146,310) =21,000-29,800-137,510 (97,310) Net Change in Cash Cash at Beginning of Period Cash at End of Period 33,100 63,000 96,100

Workings Cashflow Statement - Direct method Cash flows from from Operating Activities Sales Opening Accounts Receivable Closing Accounts Receivable Cash collections from customers 773,000 70,000 (93,500) 749,500 Cash payments Cost of sales Opening Accounts Payable Closing Accounts Payable Closing Inventory Opening Inventory Cash paid to Suppliers 430,000 58,500 (44,000) 82,800 (115,000) 412,300 Operating other expenses Opening Wages Payable Closing Wages Payable Closing Prepaid Expenses Opening Prepaid Expenses Cash paid for operating other expenses 86,000 18,800 (7,900) 6,300 (9,200) 94,000 Income tax expenses Opening Income tax Payable Closing Income tax Payable Cash paid for income taxes 45,790 7,600 (5,300) 48,090 Total Cash Payments Net Cash Provided/(Used) by Operating Activities 554,390 195,110

67,600 Workings Proceeds from sale of equipment Cost of equipment sold Accumulated Depreciation on equipment sold Opening Balance Depreciation expense Less Ending Balance Accumulated Depreciation on equipment sold Book Value of equipment sold Gain on sale of equipment Proceeds from sale of equipment 18,500 77,600 (36,500) 59,600 8,000 3,900 11,900