Required information Exercise 1211 Indirect Preparing statem

Required information Exercise 12-11 Indirect: Preparing statement of cash flows LO P1, P2, P3, A1 [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, 2017 and 2016 2017 2016 Assets Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets $ 97,900 89,000 79,800 6,000 272,700 140,000 60,000 67,000 110,500 8,600 246,100 131,000 (35,000) (17,000) $377,700 $360,100 Liabilities and Equity Accounts payable Wages payable Income taxes payable Total current liabilities Notes payable (long term) Total liabilities Equity Common stock, $5 par value Retained earnings 41,000 54,000 18,200 7,000 79,200 46,00076,000 155,200 7,600 5.000 53,600 99,600 176,000 26,10028,900 $377,700 $360,100 252,000 Total liabilities and equity

Solution

IKIBAN, INC. Statement of Cash Flows (Direct Method) For Year Ended June 30, 2017 Cash flows from operating activities Net income $131,510.00 Adjustments to reconcile net income to net cash provided by operating activities Depreciation expense $74,600.00 Gain on sale of plant assets -$3,600.00 Changes in current operating assets and liabilities Increase in accounts receivable -$22,000.00 Decrease in inventory $30,700.00 Decrease in prepaid expenses $2,600.00 Decrease in accounts payable -$13,000.00 Decrease in wages payable -$10,600.00 Decrease in income taxes payable -$2,000.00 Net cash provided by operating activities $188,210.00 Cash flows from investing activities Cash received from sale of equipment $64,600 + $56,600 - $3600 $11,600.00 Cash paid for equipment -$73,600.00 Net cash used in investing activities -$62,000.00 Cash flows from financing activities Cash received from stock issuance $76,000.00 Cash paid to retire notes -$30,000.00 Cash paid for dividends ($28,900 + $131510 - 26100) -$134,310.00 Net cash used in financing activities -$88,310.00 Net increase (decrease) in cash $37,900.00 Cash balance at prior year-end $60,000.00 Cash balance at current year-end $97,900.00