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Use the following financial statements and additional information. IKIBAN INCORPORATED Comparative Balance Sheets June 30, 2021 and 2020 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, 85 par value Retained earnings Total liabilities and equity 2021 $7,500 65,000 63,800 4,400 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense other expenses Total operating expenses Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net Income 220,700 124,000 (27,000) $317,700 $ 25,000 6,000 34,400 30,000 220,000 33,300 $317,700 IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 $50,400 2020 $1,000 86,500 106,900 115,000 $ 30,000 15,000 40,000 100,000 160,000 $678,000 411,000 141,400 143,400 899,510 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 Other Expenses on the income statement. f. All purchases and sales of inventory are on credit.

Use the following financial statements and additional information. IKIBAN INCORPORATED Comparative Balance Sheets June 30, 2021 and 2020 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, 85 par value Retained earnings Total liabilities and equity 2021 $7,500 65,000 63,800 4,400 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense other expenses Total operating expenses Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net Income 220,700 124,000 (27,000) $317,700 $ 25,000 6,000 34,400 30,000 220,000 33,300 $317,700 IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 $50,400 2020 $1,000 86,500 106,900 115,000 $ 30,000 15,000 40,000 100,000 160,000 $678,000 411,000 141,400 143,400 899,510 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 Other 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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< 1 2 3 4 5 6 7 Reconstruct the entry for the purchase of new equipment. Note: Enter debits before credits. Date June 30 < 1 6 Account Title Date June 30 Note: Enter debits before credits. 7 8 9 Close all expense accounts to income summary. Account Title 8 Debit 10 13 Credit 11 < 1 Debit Note: Enter debits before credits. Date June 30 4 13 Credit Reconstruct the entry for the issuance of common stock. 5 < 6 Account Title 1 7 6 Date June 30 Note: Enter debits before credits. 8 7 8 9 Debit Close Income Summary to Retained Earnings. 9 Account Title 13 Credit 10 < 11 1 Note: Enter debits before credits. Close all revenue and gain accounts to income summary. Date June 30 Debit 12 5 13 Credit 6 7 8 9 < Account Title 1 6 Note: Enter debits before credits. Date June 30 7 10 Debit 8 9 Account Title 13 Reconstruct the journal entry for cash dividends paid. Credit 10 11 12 Debit 13 Credit
Transcribed Image Text:< 1 2 3 4 5 6 7 Reconstruct the entry for the purchase of new equipment. Note: Enter debits before credits. Date June 30 < 1 6 Account Title Date June 30 Note: Enter debits before credits. 7 8 9 Close all expense accounts to income summary. Account Title 8 Debit 10 13 Credit 11 < 1 Debit Note: Enter debits before credits. Date June 30 4 13 Credit Reconstruct the entry for the issuance of common stock. 5 < 6 Account Title 1 7 6 Date June 30 Note: Enter debits before credits. 8 7 8 9 Debit Close Income Summary to Retained Earnings. 9 Account Title 13 Credit 10 < 11 1 Note: Enter debits before credits. Close all revenue and gain accounts to income summary. Date June 30 Debit 12 5 13 Credit 6 7 8 9 < Account Title 1 6 Note: Enter debits before credits. Date June 30 7 10 Debit 8 9 Account Title 13 Reconstruct the journal entry for cash dividends paid. Credit 10 11 12 Debit 13 Credit
Use the following financial statements and additional information. IKIBAN INCORPORATED Comparative Balance Sheets June 30, 2021 and 2020 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 Gross profit Operating expenses Depreciation expense other expenses Total operating expenses Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income Requirement IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 General Journal View transaction list Journal entry worksheet Date June 30 2 General Ledger 3 Note: Enter debits before credits. 2021 $ 87,500 65,000 63,800 4,400 220,700 124,000 (27,000) $317,700 5 $ 25,000 6,000 3,400 34,400 30,000 64,400 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 Other Expenses on the income statement. f. All purchases and sales of inventory are on credit. Account Title 220,000 33,300 $ 317,700 $ 58,600 67,000 Trial Balance Direct Method Using the income statement, the comparative balance sheet, and the additional information given above, reconstruct the enti the summarized activity of the current fiscal year. Upon completion, the trial balance tab should agree with the June 30, balances. 2020 6 $ 44,000 51,000 86,500 5,400 186,900 115,000 (9,000) $ 292,900 7 $ 30,000 15,000 3,800 48,800 60,000 108,800 160,000 24,100 $ 292,900 $ 678,000 411,000 267,000 125,600 141,400 2,000 143,400 43,890 $ 99,510 8 Reconstruct the journal entry for cash receipts from customers, incorporating the change in the related balance sheet account(s), if any. Indirect Method Debit 13 Credit > < 1 Note: Enter debits before credits. Date June 30 < 1 < 2 Reconstruct the journal entry for cash payments for inventory, incorporating the change in the related balance sheet account(s), if any. Date June 30 3 2 Note: Enter debits before credits. 1 2 3 Date June 30 4 Note: Enter debits before credits. 5 Account Title 4 3 4 5 Account Title Reconstruct the journal entry for cash paid for operatin expens incorporating the change in the related balance sheet account(s), if any. 6 5 6 Account Title 7 6 7 8 ..... 7 Debit 8 Debit 8 13 Credit Debit Reconstruct the journal entry for income taxes expense, incorporating the change in the related balance sheet account(s), if any. 13 Credit 13 Credit < < 1 Note: Enter debits before credits. Date June 30 1 < 2 Date June 30 Reconstruct the journal entry for depreciation expense, incorporating the change in the related balance sheet account(s), if any. 1 3 2 Note: Enter debits before credits. Date June 30 3 2 4 3 Note: Enter debits before credits. Reconstruct the journal entry for the sale of equipment at the change in the related balance sheet account(s), if any. 5 Account Title 4 5 4 Account Title 6 5 6 Account Title 7 6 7 8 ..... 13 7 Debit 8 Debit ain, incorporating 8 Credit 13 Reconstruct the entry to record the retirement of the $30,000 note payable at its $30,000 carrying (book) value in exchange for cash. Debit Credit 13 Credit
Transcribed Image Text:Use the following financial statements and additional information. IKIBAN INCORPORATED Comparative Balance Sheets June 30, 2021 and 2020 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 Gross profit Operating expenses Depreciation expense other expenses Total operating expenses Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income Requirement IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 General Journal View transaction list Journal entry worksheet Date June 30 2 General Ledger 3 Note: Enter debits before credits. 2021 $ 87,500 65,000 63,800 4,400 220,700 124,000 (27,000) $317,700 5 $ 25,000 6,000 3,400 34,400 30,000 64,400 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 Other Expenses on the income statement. f. All purchases and sales of inventory are on credit. Account Title 220,000 33,300 $ 317,700 $ 58,600 67,000 Trial Balance Direct Method Using the income statement, the comparative balance sheet, and the additional information given above, reconstruct the enti the summarized activity of the current fiscal year. Upon completion, the trial balance tab should agree with the June 30, balances. 2020 6 $ 44,000 51,000 86,500 5,400 186,900 115,000 (9,000) $ 292,900 7 $ 30,000 15,000 3,800 48,800 60,000 108,800 160,000 24,100 $ 292,900 $ 678,000 411,000 267,000 125,600 141,400 2,000 143,400 43,890 $ 99,510 8 Reconstruct the journal entry for cash receipts from customers, incorporating the change in the related balance sheet account(s), if any. Indirect Method Debit 13 Credit > < 1 Note: Enter debits before credits. Date June 30 < 1 < 2 Reconstruct the journal entry for cash payments for inventory, incorporating the change in the related balance sheet account(s), if any. Date June 30 3 2 Note: Enter debits before credits. 1 2 3 Date June 30 4 Note: Enter debits before credits. 5 Account Title 4 3 4 5 Account Title Reconstruct the journal entry for cash paid for operatin expens incorporating the change in the related balance sheet account(s), if any. 6 5 6 Account Title 7 6 7 8 ..... 7 Debit 8 Debit 8 13 Credit Debit Reconstruct the journal entry for income taxes expense, incorporating the change in the related balance sheet account(s), if any. 13 Credit 13 Credit < < 1 Note: Enter debits before credits. Date June 30 1 < 2 Date June 30 Reconstruct the journal entry for depreciation expense, incorporating the change in the related balance sheet account(s), if any. 1 3 2 Note: Enter debits before credits. Date June 30 3 2 4 3 Note: Enter debits before credits. Reconstruct the journal entry for the sale of equipment at the change in the related balance sheet account(s), if any. 5 Account Title 4 5 4 Account Title 6 5 6 Account Title 7 6 7 8 ..... 13 7 Debit 8 Debit ain, incorporating 8 Credit 13 Reconstruct the entry to record the retirement of the $30,000 note payable at its $30,000 carrying (book) value in exchange for cash. Debit Credit 13 Credit
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