The following financial statements and additional information are reported. IKIBAN INCORPORATED Comparative Balance Sheets At June 30 2021 2020 Assets Cash $ 92,500 $ 69,000 Accounts receivable, net 102,500 76,000 Inventory 88,800 124,000 Prepaid expenses 6,900 10,400 Total current assets 290,700 279,400 Equipment 149,000 140,000 Accumulated depreciation—Equipment (39,500) (21,500) Total assets $ 400,200 $ 397,900 Liabilities and Equity Accounts payable $ 50,000 $ 67,500 Wages payable 8,500 20,000 Income taxes payable 5,900 8,800 Total current liabilities 64,400 96,300 Notes payable (long term) 55,000 85,000 Total liabilities 119,400 181,300 Equity Common stock, $5 par value 270,000 185,000 Retained earnings 10,800 31,600 Total liabilities and equity $ 400,200 $ 397,900 IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 Sales $ 803,000 Cost of goods sold 436,000 Gross profit 367,000 Operating expenses (excluding depreciation) 92,000 Depreciation expense 83,600 191,400 Other gains (losses) Gain on sale of equipment 4,500 Income before taxes 195,900 Income taxes expense 46,390 Net income $ 149,510 Additional Information A $30,000 notes payable is retired at its $30,000 carrying (book) value in exchange for cash. The only changes affecting retained earnings are net income and cash dividends paid. New equipment is acquired for $82,600 cash. Received cash for the sale of equipment that had cost $73,600, yielding a $4,500 gain. Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement. All purchases and sales of inventory are on credit. Prepare a statement of cash flows using the indirect method for the year ended June 30, 2021.
The following financial statements and additional information are reported. IKIBAN INCORPORATED Comparative Balance Sheets At June 30 2021 2020 Assets Cash $ 92,500 $ 69,000 Accounts receivable, net 102,500 76,000 Inventory 88,800 124,000 Prepaid expenses 6,900 10,400 Total current assets 290,700 279,400 Equipment 149,000 140,000 Accumulated depreciation—Equipment (39,500) (21,500) Total assets $ 400,200 $ 397,900 Liabilities and Equity Accounts payable $ 50,000 $ 67,500 Wages payable 8,500 20,000 Income taxes payable 5,900 8,800 Total current liabilities 64,400 96,300 Notes payable (long term) 55,000 85,000 Total liabilities 119,400 181,300 Equity Common stock, $5 par value 270,000 185,000 Retained earnings 10,800 31,600 Total liabilities and equity $ 400,200 $ 397,900 IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 Sales $ 803,000 Cost of goods sold 436,000 Gross profit 367,000 Operating expenses (excluding depreciation) 92,000 Depreciation expense 83,600 191,400 Other gains (losses) Gain on sale of equipment 4,500 Income before taxes 195,900 Income taxes expense 46,390 Net income $ 149,510 Additional Information A $30,000 notes payable is retired at its $30,000 carrying (book) value in exchange for cash. The only changes affecting retained earnings are net income and cash dividends paid. New equipment is acquired for $82,600 cash. Received cash for the sale of equipment that had cost $73,600, yielding a $4,500 gain. Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement. All purchases and sales of inventory are on credit. Prepare a statement of cash flows using the indirect method for the year ended June 30, 2021.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The following financial statements and additional information are reported.
IKIBAN INCORPORATED | ||
Comparative |
||
At June 30 | 2021 | 2020 |
---|---|---|
Assets | ||
Cash | $ 92,500 | $ 69,000 |
102,500 | 76,000 | |
Inventory | 88,800 | 124,000 |
Prepaid expenses | 6,900 | 10,400 |
Total current assets | 290,700 | 279,400 |
Equipment | 149,000 | 140,000 |
(39,500) | (21,500) | |
Total assets | $ 400,200 | $ 397,900 |
Liabilities and Equity | ||
Accounts payable | $ 50,000 | $ 67,500 |
Wages payable | 8,500 | 20,000 |
Income taxes payable | 5,900 | 8,800 |
Total current liabilities | 64,400 | 96,300 |
Notes payable (long term) | 55,000 | 85,000 |
Total liabilities | 119,400 | 181,300 |
Equity | ||
Common stock, $5 par value | 270,000 | 185,000 |
10,800 | 31,600 | |
Total liabilities and equity | $ 400,200 | $ 397,900 |
IKIBAN INCORPORATED | |
Income Statement | |
For Year Ended June 30, 2021 | |
Sales | $ 803,000 |
---|---|
Cost of goods sold | 436,000 |
Gross profit | 367,000 |
Operating expenses (excluding depreciation) | 92,000 |
Depreciation expense | 83,600 |
191,400 | |
Other gains (losses) | |
Gain on sale of equipment | 4,500 |
Income before taxes | 195,900 |
Income taxes expense | 46,390 |
Net income | $ 149,510 |
Additional Information
- A $30,000 notes payable is retired at its $30,000 carrying (book) value in exchange for cash.
- The only changes affecting retained earnings are net income and cash dividends paid.
- New equipment is acquired for $82,600 cash.
- Received cash for the sale of equipment that had cost $73,600, yielding a $4,500 gain.
- Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement.
- All purchases and sales of inventory are on credit.
Prepare a statement of
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