The following financial statements and additional information are reported. IKIB
ID: 2427583 • Letter: T
Question
The following financial statements and additional information are reported. IKIBAN INC. Comparative Balance Sheets June 30, 2015 and 2014 2015 2014 Assets Cash $ 98,400 $ 55,200 Accounts receivable, net 69,300 51,800 Inventory 66,400 95,900 Prepaid expenses 4,600 6,300 Total current assets 238,700 209,200 Equipment 130,900 119,000 Accum. depreciation—Equipment (29,000 ) (10,600 ) Total assets $ 340,600 $ 317,600 Liabilities and Equity Accounts payable $ 26,900 $ 32,700 Wages payable 7,600 16,400 Income taxes payable 2,600 3,800 Total current liabilities 37,100 52,900 Notes payable (long term) 47,000 72,000 Total liabilities 84,100 124,900 Equity Common stock, $5 par value 231,000 185,000 Retained earnings 25,500 7,700 Total liabilities and equity $ 340,600 $ 317,600 IKIBAN INC. Income Statement For Year Ended June 30, 2015 Sales $ 672,000 Cost of goods sold 407,000 Gross profit 265,000 Operating expenses Depreciation expense $ 57,800 Other expenses 66,900 Total operating expenses 124,700 140,300 Other gains (losses) Gain on sale of equipment 2,200 Income before taxes 142,500 Income taxes expense 57,000 Net income $ 85,500 Additional Information a. A $25,000 note payable is retired at its $25,000 carrying (book) value in exchange for cash. b. The only changes affecting retained earnings are net income and cash dividends paid. c. New equipment is acquired for $61,000 cash. d. Received cash for the sale of equipment that had cost $49,100, yielding a $2,200 gain. e. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement. f. All purchases and sales of inventory are on credit. 5.value: 10.00 pointsRequired information Required: (1) Prepare a statement of cash flows for the year ended June 30, 2015, using the indirect method. Compute the company's cash flow on total assets ratio for its fiscal year 2015.
Explanation / Answer
Solution:
Cash flow Statement Cash flow from operating activities Net Income 85,500.00 Add: Depreciation expense 57,800.00 Less: Gain on sale of equipment - 2,200.00 Add: Income tax expense 57,000.00 Less: increase in accounts receivable - 17,500.00 Add: Decrease in inventory 29,500.00 Add: Deprease in prepaid expenses 1,700.00 Less: Decrease in accoints payable - 5,800.00 Less: Decrease in wages payable - 8,800.00 Cash flow 197,200.00 Less: Income tax paid 58,200.00 Cash flow from operating activities 139,000.00 Cash flow from investing activities Sale of Equipment 51,300.00 Less: Purchase of Equipment - 61,000.00 Cash flow from investing activities - 9,700.00 Cash flow from Financing activities Dividends Paid - 67,700.00 Redemption of notes payable - 25,000.00 Issue of common stock 46,000.00 Cash flow from Financing activities - 46,700.00 Beginning Cash 55,200.00 Add: Changes in cash 43,200.00 Ending Cash 98,400.00Related Questions
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