Question

Help me with the cash flow statement using the indirect method please.

2016 IKIBAN INC. Comparative Balance Sheets June 30, 2017 and 2016 2017 Assets Cash $ 87,500 Accounts receivable, net 65,000 Inventory 63,800 Prepaid expenses 4,400 Total current assets 220,700 Equipment 124,000 Accum. depreciation-Equipment (27.000) Total assets $317,700 Liabilities and Equity Accounts payable $ 25,000 Wages payable 6,000 Income taxes payable 3,400 Total current liabilities 34,400 Notes payable (long term) 30,000 Total liabilities 64,400 Equity Common stock, $5 par value 220,000 Retained earnings 33,300 Total liabilities and equity $317,700 $ 44,000 51,000 86,500 5,400 186,900 115,000 (9,000) $292,900 $30,000 15,000 3,800 48,800 60,000 108,800 160,000 24,100 $292,900 IKIBAN INC. Income Statement For Year Ended June 30, 2017 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $58,600 Other expenses 67,000 Total operating expenses $678,000 411,000 267,000 125,600 141,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense 2,000 143,400 43,890 e ao 510 < Prev 8 of 8

Answer 1

99510 IKIBAN INC. Statement of Cash Flows For the Year Ended December 31, 2017 Cash flows from Operating Activities Net Income Adjustments to reconcile net income to Net cash provided by Operating activities Depreciation Expense 58600 Gain on Sale of Equipment -2000 Increase in accounts receivable -14000 Decrease in Inventory 22700 Decrease in Prepaid Expense 1000 Decrease in Accounts Payable -5000 Decrease in Wages Payable -9000 Decrease in Income Tax Payable Net cash provided by Operating Activities Cash flows from Investing Activities Sale of Plant Assets 10000 Purchase of equipment -57600 Net cash used by Investing activities Cash flows from Financing Activities Issuance of Common Stock 60000 Repayment of notes -30000 Payment of Cash Dividends -90310 Net Cash used by Financing Activities Net Increase in Cash Cash at beginning of Period Cash at end of Period -400 51900 151410 -47600 -60310 43500 44000 87500

Depreciation on equipment sold = Beginning accumulated depreciation + Depreciation expense - Ending accumulated depreciation
Depreciation on equipment sold = $9,000 + $58,600 - $27,000
Depreciation on equipment sold = $40,600

Proceed from sale of equipment = Cost of equipment sold - Depreciation on equipment sold + Gain on sale of equipment
Proceed from sale of equipment = $48,600 - $40,600 + $2,000
Proceed from sale of equipment = $10,000

Dividend paid = Beginning retained earnings + Net income - Ending retained earnings
Dividend paid = $24,100 + $99,510 - $33,300
Dividend paid = $90,310