Prepare a statement of cash flows using the indirect method for the year ending June 30, 2019 IKIBAN INC.Income StatementFor Year Ended June 30, 2019$778,000431,000347,000SalesCost of goods soldGross profitOperating expensesDepreciation expenseOther expenses$78,60087,000Total operating expenses165,600181,400Other gains (losses)Gain on sale of equipment4,000185,40045,890Income before taxesIncome taxes expenseNet income$139,510Additional Informationa. 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 $77,600 cash. .d. Received cash for the sale of equipment that had cost $68,600, yielding a $4.000 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.

Cash flow statement It is one of the important financial reporting system in the entity which…

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Prepare a statement of cash flows using the indirect method for the year ending June 30, 2019

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter23: Statement Of Cash Flows

Section: Chapter Questions

Problem 12RQ

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Question

Prepare a statement of cash flows using the indirect method for the year ending June 30, 2019

IKIBAN INC.
Income Statement
For Year Ended June 30, 2019
$778,000
431,000
347,000
Sales
Cost of goods sold
Gross profit
Operating expenses
Depreciation expense
Other expenses
$78,600
87,000
Total operating expenses
165,600
181,400
Other gains (losses)
Gain on sale of equipment
4,000
185,400
45,890
Income before taxes
Income taxes expense
Net income
$139,510
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 $77,600 cash. .
d. Received cash for the sale of equipment that had cost $68,600, yielding a $4.000 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.

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