[The following information applies to the questions displayed below.] The following financial statements and additional information are reported. At June 30 Assets Cash IKIBAN INCORPORATED Comparative Balance Sheets 2021 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 $ 87,500 65,000 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 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 $ 44,000 51,000 2020 186,900 115,000 (9,000) $ 292,900 86,500 5,400 $ 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 Additional Information 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. 2,000 143,400 43,890 $ 99,510 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
[The following information applies to the questions displayed below.] The following financial statements and additional information are reported. At June 30 Assets Cash IKIBAN INCORPORATED Comparative Balance Sheets 2021 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 $ 87,500 65,000 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 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 $ 44,000 51,000 2020 186,900 115,000 (9,000) $ 292,900 86,500 5,400 $ 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 Additional Information 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. 2,000 143,400 43,890 $ 99,510 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
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA1: International Financial Reporting Standards
Section: Chapter Questions
Problem 7MCQ
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Question
![[The following information applies to the questions
displayed below.]
The following financial statements and additional information
are reported.
At June 30
Assets
Cash
IKIBAN INCORPORATED
Comparative Balance Sheets
2021
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
$ 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
sa
220,000
33,300
$ 317,700
b. The only changes affecting retained earnings are net
income and cash dividends paid.
$ 44,000
51,000
86,500
5,400
2020
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
Additional Information
a. A $30,000 notes payable is retired at its $30,000 carrying
(book) value in exchange for cash.
$ 678,000
411,000
267,000
67,000
58,600
141,400
2,000
143,400
43,890
$ 99,510
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
Cunnnnnn on the income statamant](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2b4dee1a-1261-4fbd-91e2-ece43a94b9b6%2F544a26e3-2f98-420e-b956-ded54046a90f%2F4qu3dc_processed.jpeg&w=3840&q=75)
Transcribed Image Text:[The following information applies to the questions
displayed below.]
The following financial statements and additional information
are reported.
At June 30
Assets
Cash
IKIBAN INCORPORATED
Comparative Balance Sheets
2021
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
$ 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
sa
220,000
33,300
$ 317,700
b. The only changes affecting retained earnings are net
income and cash dividends paid.
$ 44,000
51,000
86,500
5,400
2020
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
Additional Information
a. A $30,000 notes payable is retired at its $30,000 carrying
(book) value in exchange for cash.
$ 678,000
411,000
267,000
67,000
58,600
141,400
2,000
143,400
43,890
$ 99,510
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
Cunnnnnn on the income statamant
Transcribed Image Text: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.
Required:
(1) Prepare a statement of cash flows using the indirect
method for the year ended June 30, 2021. (Amounts to be
deducted should be indicated with a minus sign.)
Cash flows from operating activities
Adjustments to reconcile net income to net cash provided by operating activities
Income statement items not affecting cash
Changes in current operating assets and liabilities
Cash flows from investing activities
IKIBAN, INCORPORATED
Statement of Cash Flows (Indirect Method)
For Year Ended June 30, 2021
Cash flows from financing activities
Net increase (decrease) in cash
Cash balance at prior year-end
Cash balance at current year-end
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