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FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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(The following information applies to the questions displayed below.) The following financial statements and additional information are reported. IKIBAN INCORPORATED Comparative Balance Sheets 2021 At June 30 Assets 2020 Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation- Equipment 102,700 77,000 71,800 5,200 256,700 132,000 52,000 59,000 98,500 7,000 216,500 123,000 (31,000) (13,800) 2$ Total assets 357,700 326,500 Liabilities and Equity 2$ 42,000 16,600 5,400 64,000 68,000 132,000 2$ Accounts payable Wages payable Income taxes payable Total current liabilities Notes payable (Long term) Total liabilities Equity Common stock, $5 par value 33, е00 6,800 4,200 44,000 38,000 82,000 236,000 168,000 Retained earnings 39,700 26,500 24 326,500 24 Total liabilities and equity 357,700 IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 $ 718,000 419,000 299, 000 75,000 66,600 157,400 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes 2,800 160, 200 44,690 $ 115,510 Income taxes expense Net income Additional Information
Transcribed Image Text:(The following information applies to the questions displayed below.) The following financial statements and additional information are reported. IKIBAN INCORPORATED Comparative Balance Sheets 2021 At June 30 Assets 2020 Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation- Equipment 102,700 77,000 71,800 5,200 256,700 132,000 52,000 59,000 98,500 7,000 216,500 123,000 (31,000) (13,800) 2$ Total assets 357,700 326,500 Liabilities and Equity 2$ 42,000 16,600 5,400 64,000 68,000 132,000 2$ Accounts payable Wages payable Income taxes payable Total current liabilities Notes payable (Long term) Total liabilities Equity Common stock, $5 par value 33, е00 6,800 4,200 44,000 38,000 82,000 236,000 168,000 Retained earnings 39,700 26,500 24 326,500 24 Total liabilities and equity 357,700 IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 $ 718,000 419,000 299, 000 75,000 66,600 157,400 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes 2,800 160, 200 44,690 $ 115,510 Income taxes expense Net income Additional Information
a. A $30,000 notes payable is retired at Its $30,000 carrying (book) value In exchange for cash. b. The only changes affecting retalined earnings are net income and cash dividends pald. c. New equipment is acquired for $65,600 cash. d. Recelved cash for the sale of equipment that had cost $56,600, ylelding a $2,800 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. Required: (1) Prepare a statement of cash flows using the indirect method for the year ended June 30, 2021. (Amounts to be deducted should be indicated with a minus sign.) IKIBAN, INCORPORATED Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2021 Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Changes in current operating assets and liabilities Cash flows from investing activities Cash flows from financing activities Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end
Transcribed Image Text:a. A $30,000 notes payable is retired at Its $30,000 carrying (book) value In exchange for cash. b. The only changes affecting retalined earnings are net income and cash dividends pald. c. New equipment is acquired for $65,600 cash. d. Recelved cash for the sale of equipment that had cost $56,600, ylelding a $2,800 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. Required: (1) Prepare a statement of cash flows using the indirect method for the year ended June 30, 2021. (Amounts to be deducted should be indicated with a minus sign.) IKIBAN, INCORPORATED Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2021 Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Changes in current operating assets and liabilities Cash flows from investing activities Cash flows from financing activities Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end
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