Required: (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.
Required: (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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Required Information
Exercise 12-12 (Static) Indirect: Preparing statement of cash flows LO P2, P3, A1
[The following information applies to the questions displayed below.]
The following financial statements and additional information are reported.
IKIBAN INCORPORATED
Comparative Balance Sheets
2021
2020
$ 87,500
65,000
$ 44,000
51,000
86,500
At June 30
Assets
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
IKIBAN INCORPORATED
Income Statement
63,800
4,400
5,400
220,700
186,900
124,000
(27,000)
$ 317,700
$ 25,000
115,000
(9,000)
$292,900
$ 30,000
15,000
3,800
6,000
3,400
34,400
48,800
30,000
60,000
64,400
108,800
220,000
160,000
33,300
$317,700
24,100
For Year Ended June 30, 2021
$292,900
$ 678,000
411,000
267,000
67,000
58,600
141,400
2,000
143,400
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
43,898
$ 99,510
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 $57,600 cash.
d. Received cash for the sale of equipment that had cost $48,600, yielding a $2,000 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.
Exercise 12-12 (Static) Part 1
Required:
(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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2d31b727-ca47-41d3-943c-2c937609eac6%2Fb2e84dd5-9a6f-4791-af43-b472ece91415%2Ft770i2_processed.png&w=3840&q=75)
Transcribed Image Text:Required Information
Exercise 12-12 (Static) Indirect: Preparing statement of cash flows LO P2, P3, A1
[The following information applies to the questions displayed below.]
The following financial statements and additional information are reported.
IKIBAN INCORPORATED
Comparative Balance Sheets
2021
2020
$ 87,500
65,000
$ 44,000
51,000
86,500
At June 30
Assets
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
IKIBAN INCORPORATED
Income Statement
63,800
4,400
5,400
220,700
186,900
124,000
(27,000)
$ 317,700
$ 25,000
115,000
(9,000)
$292,900
$ 30,000
15,000
3,800
6,000
3,400
34,400
48,800
30,000
60,000
64,400
108,800
220,000
160,000
33,300
$317,700
24,100
For Year Ended June 30, 2021
$292,900
$ 678,000
411,000
267,000
67,000
58,600
141,400
2,000
143,400
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
43,898
$ 99,510
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 $57,600 cash.
d. Received cash for the sale of equipment that had cost $48,600, yielding a $2,000 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.
Exercise 12-12 (Static) Part 1
Required:
(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.
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