Required information Exercise 16-11 Indirect: Preparing statement of cash flows

Question

Required information Exercise 16-11 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 $ 97,300 $ 61,000 68,000 112,000 8,800 249,800 132,000 (35,500) (17,500 $380,200 $364,300 90,500 80,800 6,100 274,700 141,000 Liabilities and Equity Accounts payable Wages payablee Income taxes payable Totalcurrent liabilities Notes payable (long term) Total liabilities Equity Common stock, 5 par valuee Retained earnings $ 42,000 7,700 5,100 54,800 47,000 101,800 55,500 18,400 7.200 81,100 77.000 158,100 177,000 29,200 $380,200 $364,300 254,000 24,400 Total liabilities and equity

Explanation / Answer

Statement of cash Flows Cash flow from operating activities Net income for the year 133,510 Adjustments to reconcile net income to net cash provided by operating activities Depreciation expense 75,600 Gain on sale of Equipment -3,700 Changes in current operating assets and liabilities increase in accounts receivable -22500 Decrease in inventory 31200 Decrease in prepaid expense 2700 Decrease in accounts payable -13500 Decrease in wages payable -10700 Decrease in income taxes payable -2100 net cash provided by operating activities 190,510 Cash flow from investing activities purchase of Equipment -74,600 Cash received from sale of Equipment 11,700 net cash used by investing activities -62,900 Cash flow from financing activities cash paid for notes payable -30,000 Cash from stock issue 77000 cash dividend -138,310 Net cash used by investing activities -91,310 net increase in cash 36,300 Cash at the beginning of the year 61,000 cash at year end 97,300 Working notes: cash received from sale of equipment cost of Equipment 65,600 Accumulated dep 57,600 Book value 8,000 Add:Gain on sale 3,700 cash received from sale of equipment 11,700 Accumulated depreciation on sold Equipment opening bal 17,500 add depreciation expense for year 75,600 total 93,100 less closing balance 35,500 Accumulated depreciation on sold Equipment 57,600 Dividend paid opening retained earnings 29,200 Add : net income 133,510 162,710 less closing retained earnings -24400 Dividends paid 138,310

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