IKIBAN INC.
Comparative Balance Sheets
June 30, 2013 and 2012
2013 2012 Assets Cash $ 87,500 $ 44,000 Accounts receivable, net 65,000 51,000 Inventory 63,800 86,500 Prepaid expenses 4,400 5,400 Equipment 124,000 115,000 Accum. depreciationâEquipment (27,000 ) (9,000 ) Total assets $ 317,700 $ 292,900 Liabilities and Equity Accounts payable $ 25,000 $ 30,000 Wages payable 6,000 15,000 Income taxes payable 3,400 3,800 Notes payable (long term) 30,000 60,000 Common stock, $5 par value 220,000 160,000 Retained earnings 33,300 24,100 Total liabilities and equity $ 317,700 $ 292,900
IKIBAN INC.
Income Statement
For Year Ended June 30, 2013 Sales $ 678,000 Costof goods sold 411,000 Gross profit 267,000 Operating expenses Depreciation expense $ 58,600 Other expenses 67,000 Total operating expenses 125,600 141,400 Other gains (losses) Gain on sale ofequipment 2,000 Income before taxes 143,400 Income taxes expense 43,890 Netincome $ 99,510
Additional Information
a. A $30,000 notepayable is retired at its $30,000 carrying (book) value in exchangefor cash. b. The only changesaffecting retained earnings are net income and cash dividendspaid. c. New equipment isacquired for $57,600 cash. d. Received cashfor the sale of equipment that had cost $48,600, yielding a $2,000gain. e. Prepaid Expensesand Wages Payable relate to Other Expenses on the incomestatement. f. All purchasesand sales of merchandise inventory are on credit.
IKIBAN, INC. Statement of Cash Flows(Indirect Method) For Year Ended June 30,2013 Cash flows from operatingactivities Net income Adjustments toreconcile net income to net cash provided by operatingactivities Increase in accounts receivable Decrease in merchandise inventory Decrease in prepaid expenses Decrease in accounts payable Decrease in wages payable Decrease in income taxes payable Depreciation expense Gain on sale of plant assets Net cash providedby operating activities Cash flows from investingactivities Cash received from sale ofequipment Cash paid for equipment Net cash used in investingactivities Cash flows from financingactivities Cash received from stockissuance Cash paid to retire notes Cash paid for dividends --- Net cash used in financingactivities Net increase (decrease) incash Cash balance at prioryear-end Cash balance atcurrent year-end ----
(2) Compute the company's cash flow on total assets ratio for itsfiscal year 2013.
Cash Flow on Total AssetsRatio ChooseNumerator: / ChooseDenominator: = Cash Flow on TotalAssets Ratio Financing cash flows / Average current liabilities = Cash Flow on TotalAssets Ratio / = 0
+
IKIBAN INC. | ||||||||
| 2013 | 2012 | |||||||
| Assets | ||||||||
| Cash | $ | 87,500 | $ | 44,000 | ||||
| Accounts receivable, net | 65,000 | 51,000 | ||||||
| Inventory | 63,800 | 86,500 | ||||||
| Prepaid expenses | 4,400 | 5,400 | ||||||
| Equipment | 124,000 | 115,000 | ||||||
| Accum. depreciationâEquipment | (27,000 | ) | (9,000 | ) | ||||
| Total assets | $ | 317,700 | $ | 292,900 | ||||
| Liabilities and Equity | ||||||||
| Accounts payable | $ | 25,000 | $ | 30,000 | ||||
| Wages payable | 6,000 | 15,000 | ||||||
| Income taxes payable | 3,400 | 3,800 | ||||||
| Notes payable (long term) | 30,000 | 60,000 | ||||||
| Common stock, $5 par value | 220,000 | 160,000 | ||||||
| Retained earnings | 33,300 | 24,100 | ||||||
| Total liabilities and equity | $ | 317,700 | $ | 292,900 | ||||
| IKIBAN INC. Income Statement For Year Ended June 30, 2013 | ||||||
| Sales | $ | 678,000 | ||||
| Costof goods sold | 411,000 | |||||
| Gross profit | 267,000 | |||||
| Operating expenses | ||||||
| Depreciation expense | $ | 58,600 | ||||
| Other expenses | 67,000 | |||||
| Total operating expenses | 125,600 | |||||
| 141,400 | ||||||
| Other gains (losses) | ||||||
| Gain on sale ofequipment | 2,000 | |||||
| Income before taxes | 143,400 | |||||
| Income taxes expense | 43,890 | |||||
| Netincome | $ | 99,510 | ||||
| Additional Information |
| a. | A $30,000 notepayable is retired at its $30,000 carrying (book) value in exchangefor cash. |
| b. | The only changesaffecting retained earnings are net income and cash dividendspaid. |
| c. | New equipment isacquired for $57,600 cash. |
| d. | Received cashfor the sale of equipment that had cost $48,600, yielding a $2,000gain. |
| e. | Prepaid Expensesand Wages Payable relate to Other Expenses on the incomestatement. |
| f. | All purchasesand sales of merchandise inventory are on credit. |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
+ | ||||||||||||||||||||||||||||||||||||||||
Related questions
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.depreciationâEquipment | (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.)
Required information
[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 | $ | 93,700 | $ | 67,000 | ||||
| Accounts receivable, net | 99,500 | 74,000 | ||||||
| Inventory | 86,800 | 121,000 | ||||||
| Prepaid expenses | 6,700 | 10,000 | ||||||
| Total current assets | 286,700 | 272,000 | ||||||
| Equipment | 147,000 | 138,000 | ||||||
| Accum.depreciationâEquipment | (38,500 | ) | (20,500 | ) | ||||
| Total assets | $ | 395,200 | $ | 389,500 | ||||
| Liabilities and Equity | ||||||||
| Accounts payable | $ | 48,000 | $ | 64,500 | ||||
| Wages payable | 8,300 | 19,600 | ||||||
| Income taxes payable | 5,700 | 8,400 | ||||||
| Total current liabilities | 62,000 | 92,500 | ||||||
| Notes payable (long term) | 53,000 | 83,000 | ||||||
| Total liabilities | 115,000 | 175,500 | ||||||
| Equity | ||||||||
| Common stock, $5 par value | 266,000 | 183,000 | ||||||
| Retained earnings | 14,200 | 31,000 | ||||||
| Total liabilities andequity | $ | 395,200 | $ | 389,500 | ||||
| IKIBAN INC. Income Statement For Year Ended June 30, 2017 | ||||||
| Sales | $ | 793,000 | ||||
| Cost of goods sold | 434,000 | |||||
| Gross profit | 359,000 | |||||
| Operating expenses | ||||||
| Depreciation expense | $ | 81,600 | ||||
| Other expenses | 90,000 | |||||
| Total operating expenses | 171,600 | |||||
| 187,400 | ||||||
| Other gains (losses) | ||||||
| Gain on sale of equipment | 4,300 | |||||
| Income before taxes | 191,700 | |||||
| Income taxes expense | 46,190 | |||||
| Net income | $ | 145,510 | ||||
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 $80,600 cash.
Received cash for the sale of equipment that had cost $71,600,yielding a $4,300 gain.
Prepaid Expenses and Wages Payable relate to Other Expenses onthe income statement.
All purchases and sales of inventory are on credit.
rev: 06_20_2017_QC_CS-91585, 12_05_2017_QC_CS-111198
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.)
[The following information applies to thequestions displayed below.]
| The followingfinancial statements and additional information are reported. |
| IKIBAN INC. Comparative Balance Sheets June 30, 2015 and 2014 | ||||||||
| 2015 | 2014 | |||||||
| Assets | ||||||||
| Cash | $ | 111,800 | $ | 69,700 | ||||
| Accounts receivable, net | 69,100 | 51,200 | ||||||
| Inventory | 65,900 | 96,200 | ||||||
| Prepaid expenses | 5,000 | 5,600 | ||||||
| Total current assets | 251,800 | 222,700 | ||||||
| Equipment | 125,800 | 115,000 | ||||||
| Accum. depreciationâEquipment | (28,700 | ) | (10,700 | ) | ||||
| Total assets | $ | 348,900 | $ | 327,000 | ||||
| Liabilities and Equity | ||||||||
| Accounts payable | $ | 26,500 | $ | 32,200 | ||||
| Wages payable | 7,900 | 16,900 | ||||||
| Income taxes payable | 2,800 | 3,600 | ||||||
| Total current liabilities | 37,200 | 52,700 | ||||||
| Notes payable (long term) | 50,000 | 77,000 | ||||||
| Total liabilities | 87,200 | 129,700 | ||||||
| Equity | ||||||||
| Common stock, $5 par value | 237,000 | 189,000 | ||||||
| Retained earnings | 24,700 | 8,300 | ||||||
| Total liabilities and equity | $ | 348,900 | $ | 327,000 | ||||
| IKIBAN INC. Income Statement For Year Ended June 30, 2015 | ||||||
| Sales | $ | 677,000 | ||||
| Costof goods sold | 411,000 | |||||
| Gross profit | 266,000 | |||||
| Operating expenses | ||||||
| Depreciation expense | $ | 58,600 | ||||
| Other expenses | 66,900 | |||||
| Total operating expenses | 125,500 | |||||
| 140,500 | ||||||
| Other gains (losses) | ||||||
| Gain on sale ofequipment | 2,700 | |||||
| Income before taxes | 143,200 | |||||
| Income taxes expense | 57,280 | |||||
| Netincome | $ | 85,920 | ||||
| Additional Information |
| a. | A $27,000 notepayable is retired at its $27,000 carrying (book) value in exchangefor cash. |
| b. | The only changesaffecting retained earnings are net income and cash dividendspaid. |
| c. | New equipment isacquired for $59,500 cash. |
| d. | Received cashfor the sale of equipment that had cost $48,700, yielding a $2,700gain. |
| e. | Prepaid Expensesand Wages Payable relate to Other Expenses on the incomestatement. |
| f. | All purchasesand sales of inventory are on credit. |
(1) Prepare a statement of cash flows for the year ended June30, 2015, using the indirect method. (Amounts to bededucted should be indicated with a minus sign.)
(2) Compute the company's cash flow on total assets ratio forits fiscal year 2015.
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
