At June 30 Assets IKIBAN INCORPORATED Comparative Balance Sheets 2021 Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets 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 Total liabilities and equity Sales Cost of goods sold $ 94,300 98,000 2020 $ 66,000 73,000 119,500 85,800 6,600 9,800 284,700 268,300 146,000 (38,000) $ 392,700 $ 47,000 8,200 137,000 (20,000) $ 385,300 $ 63,000 19,400 8,200 5,600 60,800 90,600 52,000 82,000 112,800 172,600 264,000 182,000 15,900 $ 392,700 30,700 $ 385,300 IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 $ 788,000 433,000 355,000 89,000 Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income Additional Information 80,600 185,400 4,200 189,600 46,090 $ 143,510 a. A $30,000 notes 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 $79,600 cash. d. Received cash for the sale of equipment that had cost $70,600, yielding a $4,200 gain. e. Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement. f. All purchases and sales of inventory are on credit. (1) Prepare a statement of cash flows using the indirect method for the year ended June 30, 2021. Note: Amounts to be deducted should be indicated with a minus sign. Cash flows from operating activities Net income IKIBAN, INCORPORATED Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2021 Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Depreciation expense Changes in current operating assets and liabilities. Increase in accounts receivable Decrease in inventory Decrease in prepaid expenses Decrease in accounts payable Decrease in wages payable Decrease in income taxes payable Net cash provided by operating activities Cash flows from investing activities Net cash used in investing activities Cash flows from financing activities $ 0 0

At June 30 Assets IKIBAN INCORPORATED Comparative Balance Sheets 2021 Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets 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 Total liabilities and equity Sales Cost of goods sold $ 94,300 98,000 2020 $ 66,000 73,000 119,500 85,800 6,600 9,800 284,700 268,300 146,000 (38,000) $ 392,700 $ 47,000 8,200 137,000 (20,000) $ 385,300 $ 63,000 19,400 8,200 5,600 60,800 90,600 52,000 82,000 112,800 172,600 264,000 182,000 15,900 $ 392,700 30,700 $ 385,300 IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 $ 788,000 433,000 355,000 89,000 Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income Additional Information 80,600 185,400 4,200 189,600 46,090 $ 143,510 a. A $30,000 notes 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 $79,600 cash. d. Received cash for the sale of equipment that had cost $70,600, yielding a $4,200 gain. e. Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement. f. All purchases and sales of inventory are on credit. (1) Prepare a statement of cash flows using the indirect method for the year ended June 30, 2021. Note: Amounts to be deducted should be indicated with a minus sign. Cash flows from operating activities Net income IKIBAN, INCORPORATED Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2021 Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Depreciation expense Changes in current operating assets and liabilities. Increase in accounts receivable Decrease in inventory Decrease in prepaid expenses Decrease in accounts payable Decrease in wages payable Decrease in income taxes payable Net cash provided by operating activities Cash flows from investing activities Net cash used in investing activities Cash flows from financing activities $ 0 0

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter4: The Balance Sheet And The Statement Of Shareholders' Equity

Section: Chapter Questions

Problem 16P: Ratios Analyses: McCormick Refer to the information for McCormick above. Additional information for...

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