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.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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.
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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