Exercise 12-12 (Algo) Indirect: Preparing statement of cash flows LO P2, P3, A1 Skip to question [The following information applies to the questions displayed below.] The following financial statements and additional information are reported. IKIBAN INCORPORATED Comparative Balance Sheets At June 30 2021 2020 Assets Cash $ 97,900 $ 60,000 Accounts receivable, net 89,000 67,000 Inventory 79,800 110,500 Prepaid expenses 6,000 8,600 Total current assets 272,700 246,100 Equipment 140,000 131,000 Accumulated depreciation—Equipment (35,000) (17,000) Total assets $ 377,700 $ 360,100 Liabilities and Equity Accounts payable $ 41,000 $ 54,000 Wages payable 7,600 18,200 Income taxes payable 5,000 7,000 Total current liabilities 53,600 79,200 Notes payable (long term) 46,000 76,000 Total liabilities 99,600 155,200 Equity Common stock, $5 par value 252,000 176,000 Retained earnings 26,100 28,900 Total liabilities and equity $ 377,700 $ 360,100 IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 Sales $ 758,000 Cost of goods sold 427,000 Gross profit 331,000 Operating expenses (excluding depreciation) 83,000 Depreciation expense 74,600 173,400 Other gains (losses) Gain on sale of equipment 3,600 Income before taxes 177,000 Income taxes expense 45,490 Net income $ 131,510 Additional Information A $30,000 notes payable is retired at its $30,000 carrying (book) value in exchange for cash. The only changes affecting retained earnings are net income and cash dividends paid. New equipment is acquired for $73,600 cash. Received cash for the sale of equipment that had cost $64,600, yielding a $3,600 gain. Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement. All purchases and sales of inventory are on credit.
Exercise 12-12 (Algo) Indirect: Preparing statement of cash flows LO P2, P3, A1 Skip to question [The following information applies to the questions displayed below.] The following financial statements and additional information are reported. IKIBAN INCORPORATED Comparative Balance Sheets At June 30 2021 2020 Assets Cash $ 97,900 $ 60,000 Accounts receivable, net 89,000 67,000 Inventory 79,800 110,500 Prepaid expenses 6,000 8,600 Total current assets 272,700 246,100 Equipment 140,000 131,000 Accumulated depreciation—Equipment (35,000) (17,000) Total assets $ 377,700 $ 360,100 Liabilities and Equity Accounts payable $ 41,000 $ 54,000 Wages payable 7,600 18,200 Income taxes payable 5,000 7,000 Total current liabilities 53,600 79,200 Notes payable (long term) 46,000 76,000 Total liabilities 99,600 155,200 Equity Common stock, $5 par value 252,000 176,000 Retained earnings 26,100 28,900 Total liabilities and equity $ 377,700 $ 360,100 IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 Sales $ 758,000 Cost of goods sold 427,000 Gross profit 331,000 Operating expenses (excluding depreciation) 83,000 Depreciation expense 74,600 173,400 Other gains (losses) Gain on sale of equipment 3,600 Income before taxes 177,000 Income taxes expense 45,490 Net income $ 131,510 Additional Information A $30,000 notes payable is retired at its $30,000 carrying (book) value in exchange for cash. The only changes affecting retained earnings are net income and cash dividends paid. New equipment is acquired for $73,600 cash. Received cash for the sale of equipment that had cost $64,600, yielding a $3,600 gain. Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement. All purchases and sales of inventory are on credit.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Exercise 12-12 (Algo) Indirect: Preparing statement of cash flows LO P2, P3, A1
Skip to question
[The following information applies to the questions displayed below.]
The following financial statements and additional information are reported.
| IKIBAN INCORPORATED | ||
| Comparative Balance Sheets | ||
| At June 30 | 2021 | 2020 |
|---|---|---|
| Assets | ||
| Cash | $ 97,900 | $ 60,000 |
| Accounts receivable, net | 89,000 | 67,000 |
| Inventory | 79,800 | 110,500 |
| Prepaid expenses | 6,000 | 8,600 |
| Total current assets | 272,700 | 246,100 |
| Equipment | 140,000 | 131,000 |
| (35,000) | (17,000) | |
| Total assets | $ 377,700 | $ 360,100 |
| Liabilities and Equity | ||
| Accounts payable | $ 41,000 | $ 54,000 |
| Wages payable | 7,600 | 18,200 |
| Income taxes payable | 5,000 | 7,000 |
| Total current liabilities | 53,600 | 79,200 |
| Notes payable (long term) | 46,000 | 76,000 |
| Total liabilities | 99,600 | 155,200 |
| Equity | ||
| Common stock, $5 par value | 252,000 | 176,000 |
| 26,100 | 28,900 | |
| Total liabilities and equity | $ 377,700 | $ 360,100 |
| IKIBAN INCORPORATED | |
| Income Statement | |
| For Year Ended June 30, 2021 | |
| Sales | $ 758,000 |
|---|---|
| Cost of goods sold | 427,000 |
| Gross profit | 331,000 |
| Operating expenses (excluding depreciation) | 83,000 |
| Depreciation expense | 74,600 |
| 173,400 | |
| Other gains (losses) | |
| Gain on sale of equipment | 3,600 |
| Income before taxes | 177,000 |
| Income taxes expense | 45,490 |
| Net income | $ 131,510 |
Additional Information
- A $30,000 notes payable is retired at its $30,000 carrying (book) value in exchange for cash.
- The only changes affecting retained earnings are net income and cash dividends paid.
- New equipment is acquired for $73,600 cash.
- Received cash for the sale of equipment that had cost $64,600, yielding a $3,600 gain.
- Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement.
- All purchases and sales of inventory are on credit.
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