Using the Direct Method, prepare the statement of Cash flows for the year June 3

Question

Using the Direct Method, prepare the statement of Cash flows for the year June 30, 2017. Comparative Balance Sheet:s June 38, 2917 and 2816 Assets Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets 99,700 57,0ee 64,000 76,80 16,8e0 8,800 235,800 137,800128,000 84,580 5,700 266,70 (33,500) (15,500) 5370,200 347,580 Liabilities and Equity Accounts payable Hages payable Income taxes payable Total current liabilities Notes payable (long term Total 1iabilities Equity Common stock, S5 par value Retained earnings Total liabilities and equity 38,000 4,700 50,000 43,000 93,000 49,580 7,30017,608 6,400 73,500 73,000 146,500 246,000 173,000 28,000 $370,280 $347,500 31,200 IKIBAN INC Income Statement For Year Ended June 30, 2017 Sales Cost of goods sold Gross profit Operating expenses 5743,000 424,003 319,000 571,600 80,000 Depreciation expense Other expenses Total operating expenses 151,600 167,400 Other gains (losses) Gein on sale of equipment Income before taxes Income taxes expense iet income 178,780 45,190 125,51 Additional Information a. A $30,000 note payable is retired at its $30.000 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 $70,600 cash d. Received cash for the sale of equipment that had cost $61,600. yleiding a $3,300 gain e. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement t All purchases and sales of inventory are on credit

Explanation / Answer

CASHFLOW STATEMENT Cashflows from Operating Activities: Cash collections from Accounts recievable (743000+64000-84500) 722500 Cash paid to Accounts payable -406300 Cash paid for other expense (80000-8000+5700+17600-7300) -88000 Taxes paid (45190+6400-4700) -46890 Net cash provided from Operating Activities 181310 Cash flows from Investing Activities Purchase of equipment -70600 Sale of equipment 11300 Net cash used in Investing activities -59300 Cashflows from Financing activities Notes payable retired -30000 Issue of common stock 73000 Cash dividend paid -122310 Net cash used in Financing activities -79310 Net increase in cash 42700 Add: Beginning balance of cash 57000 Ending balance of cash 99700 Note: Cash paid for Wages payable and Accounts payable Cost of Goods sold 424000 Add: Ending Inventory 76800 Less: beginning inventory 106000 394800 Add: Accounts payable beg. 49500 Less: Accounts payable End. 38000 Payment made 406300 Note: Sale value of Equipment Accumulated dep balance in beg. 15500 Add: Depreciation 71600 Less: Accumulated dep balance in end -33500 Accumulated dep on sold equipment 53600 Cost of equipment 61600 Less: Accumulated depreciation -53600 Book value of equipment 8000 Add: gain on sale 3300 Sale value of equipment 11300

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