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Sales Cost of goods sold Gross profit IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income $ 678,000 411,000 267,000 67,000 58,600 141,400 2,000 143,400 43,890 $ 99,510 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 $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.

Sales Cost of goods sold Gross profit IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income $ 678,000 411,000 267,000 67,000 58,600 141,400 2,000 143,400 43,890 $ 99,510 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 $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.

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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At June 30 Assets Cash IKIBAN INCORPORATED Comparative Balance Sheets 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 Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 2021 $ 87,500 65,000 63,800 4,400 220,700 124,000 (27,000) $ 317,700 IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 $ 25,000 6,000 3,400 34,400 30,000 64,400 220,000 33,300 $317,700 2020 $ 44,000 51,000 86,500 5,400 186,900 115,000 (9,000) $ 292,900 $ 30,000 15,000 3,800 48,800 60,000 108,800 160,000 24,100 $ 292,900 $ 678,000 411,000 267,000 67,000 58,600 141,400 2,000 143,400 43,890 $ 99,510 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 $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.
Transcribed Image Text:At June 30 Assets Cash IKIBAN INCORPORATED Comparative Balance Sheets 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 Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 2021 $ 87,500 65,000 63,800 4,400 220,700 124,000 (27,000) $ 317,700 IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 $ 25,000 6,000 3,400 34,400 30,000 64,400 220,000 33,300 $317,700 2020 $ 44,000 51,000 86,500 5,400 186,900 115,000 (9,000) $ 292,900 $ 30,000 15,000 3,800 48,800 60,000 108,800 160,000 24,100 $ 292,900 $ 678,000 411,000 267,000 67,000 58,600 141,400 2,000 143,400 43,890 $ 99,510 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 $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.
Using the direct method, prepare the statement of cash flows for the year ended June 30, 2021. (Amounts to be deducted should be Indicated with a minus sign.) IKIBAN, INCORPORATED Statement of Cash Flows (Direct Method) For Year Ended June 30, 2021 Cash flows from operating activities Cash paid for operating expenses 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 S $ S 0 0 0 0 0
Transcribed Image Text:Using the direct method, prepare the statement of cash flows for the year ended June 30, 2021. (Amounts to be deducted should be Indicated with a minus sign.) IKIBAN, INCORPORATED Statement of Cash Flows (Direct Method) For Year Ended June 30, 2021 Cash flows from operating activities Cash paid for operating expenses 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 S $ S 0 0 0 0 0
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