Question

Exercise 12-11 Indirect: Preparing statement of cash flows LOP1, P2, P3, A1

[The following information applies to the questionsdisplayed below.]

The following financial statements and additional informationare reported.

IKIBAN INC. Comparative Balance Sheets June 30, 2017 and 2016
	2017				2016
Assets
Cash	$	87,500			$	44,000
Accountsreceivable, net		65,000				51,000
Inventory		63,800				86,500
Prepaidexpenses		4,400				5,400
Total currentassets		220,700				186,900
Equipment		124,000				115,000
Accum.depreciation—Equipment		(27,000	)			(9,000	)
Totalassets	$	317,700			$	292,900
Liabilities andEquity
Accountspayable	$	25,000			$	30,000
Wagespayable		6,000				15,000
Income taxespayable		3,400				3,800
Total currentliabilities		34,400				48,800
Notes payable(long term)		30,000				60,000
Totalliabilities		64,400				108,800
Equity
Common stock, $5par value		220,000				160,000
Retainedearnings		33,300				24,100
Totalliabilities and equity	$	317,700			$	292,900

IKIBAN INC. Income Statement For Year Ended June 30, 2017
Sales				$	678,000
Cost of goodssold					411,000
Grossprofit					267,000
Operatingexpenses
Depreciationexpense	$	58,600
Otherexpenses		67,000
Total operatingexpenses					125,600
					141,400
Other gains(losses)
Gain on sale ofequipment					2,000
Income beforetaxes					143,400
Income taxesexpense					43,890
Net income				$	99,510

Additional Information

A $30,000 note payable is retired at its $30,000 carrying (book)value in exchange for cash.

The only changes affecting retained earnings are net income andcash dividends paid.

New equipment is acquired for $57,600 cash.

Received cash for the sale of equipment that had cost $48,600,yielding a $2,000 gain.

Prepaid Expenses and Wages Payable relate to Other Expenses onthe income statement.

All purchases and sales of inventory are on credit.

Exercise 12-11 Part 1

Required:

(1) Prepare a statement of cash flows for theyear ended June 30, 2017, using the indirect method.(Amounts to be deducted should be indicated with a minussign.)