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 $100,300 $ 56,000 Accounts receivable, net 83,000 63,000 Inventory 75,800 104,500 Prepaid expenses 5,600 7,800 Total current assets 264, 700 231,300 Equipment 136,000 127,000 Accum. depreciation Equipment (33,000) (15,000) Total assets $367,700 $343,300 Liabilities and Equity Accounts payable $ 37,000 $ 48,000 Wages payable 7,200 17,400 Income taxes payable 4,600 6,200 Total current liabilities 48,800 71,600 Notes payable (long term) 42,000 72,000 Total liabilities 90,800143,600 Equity Common stock, $5 par value 244,000 172,000 Retained earnings 32,900 27,700 Total liabilities and equity $367,700 $343,300 IKIBAN INC. Income Statement For Year Ended June 30, 2019 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $ 70,600 Other expenses 79,000 Total operating expenses $ 738,000 423,000 315,000 149,600 165,400 Other gains (losses) Cain on sale of equipment Income before taxes Income taxes expense Net income 3,200 168,600 45,090 $123,510

Answer 1

Solution:

Details Amount $123,510.00 IKIBAN INC. Statement of Cash Flows For the Year ended June 30, 2019 Particulars 7 Cash Flow from Operating Activities: 8 Net Income Adjustments to reconcile net income to Net cash provided by operating activities: 10 Income Statement items not effecting Cash: 11 Depreciation 12 Gain on sale of Equipment 13 Changes in Current operating assets and liabilities: 14 Increase in Accounts Receivables ($63000 - $83000) 15 Decrease in Inventory ($104500-$75800) 16 Decrease in Prepaid Expenses ($7800-5600) 17 Decrease in Accounts Payable ($37000 -48000) 18 Decrease in Wages Payable ($7200 - $17400) 19 Decrease in income tax Payable ($4600 - $6200) $70,600.00 $3,200.00 -$20,000.00 $28,700.00 $2,200.00 $11,000.00 $10,200.00 $1,600.00 20 $179,010.00 $11,200.00 $69,600.00 $58,400.00 21 Net Cash Flow From Operating Activities (A) 22 23 Cash Flow from Investing Activities: 24 Cash Received from sale of Equipment (Working Note 1) 25 Purchase of Equipment (In cash) 26 27 Net Cash Flow From Investing Activities (B) 28 29 Cash Flow from Financing Activities: 30 Repayment of Long Term Note Payable ($54000- $84000) 31 Cash received from issue of common stock (244000-172000) 32 Dividend paid ($27700+123510-32900) 33 34 Net Cash Flow From Financing Activities (C) $30,000.00 $72,000.00 $118,310.00 $76,310.00 35 36 Total Cash flow from all activities (A+B+C) 37 Cash Balance at prior year-end 38 Cash Balance at Current year-end 39 40 $44,300.00 $56,000.00 $100,300.00 42 43 44 45 46 47 48 et944 Sheet26 (21) Sheet616 (2) Sheet936 Sheet106 (19)

Working Note 1: Sale value of Equipment:

Accumulated depreciation on Equipment sold = 15000+70600-33000 = $60,600

Book Value of Equipment sold = Cost - Accumulated Depreciation = $60600- $52600 = $8000

Sale Value of Equipment = Book Value + gain on sale = $8000+ $3200 = $11,200