IKIBAN INC.
Comparative Balance Sheets
June 30, 2015 and 2014
2015
2014
Assets
Cash
$
96,500
$
56,200
Accounts receivable, net
69,300
51,400
Inventory
66,600
96,800
Prepaid expenses
5,100
6,400
Total current assets
237,500
210,800
Equipment
135,200
120,000
Accum. depreciationâEquipment
(28,900
)
(10,500
)
Total assets
$
343,800
$
320,300
Liabilities and Equity
Accounts payable
$
26,900
$
32,200
Wages payable
7,100
16,700
Income taxes payable
2,500
4,100
Total current liabilities
36,500
53,000
Notes payable (long term)
42,000
70,000
Total liabilities
78,500
123,000
Equity
Common stock, $5 par value
240,000
189,000
Retained earnings
25,300
8,300
Total liabilities and equity
$
343,800
$
320,300
IKIBAN INC.
Income Statement
For Year Ended June 30, 2015
Sales
$
673,000
Cost of goods sold
407,000
Gross profit
266,000
Operating expenses
Depreciation expense
$
53,000
Other expenses
66,900
Total operating expenses
119,900
146,100
Other gains (losses)
Gain on sale of equipment
2,600
Income before taxes
148,700
Income taxes expense
59,480
Net income
$
89,220
a. A $28,000 note payable is retired at its $28,000 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 $63,800 cash.
d. Received cash for the sale of equipment that had cost $48,600, yielding a $2,600 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.
IKIBAN, INC.
Statement of Cash Flows (Indirect Method)
For Year Ended June 30, 2015
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
$0
Cash flows from investing activities
0
Cash flows from financing activities
0
Net increase (decrease) in cash
$0
Cash balance at prior year-end
Cash balance at current year-end
$0
Cash Flow on Total Assets Ratio
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Cash Flow on Total Assets Ratio
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Cash flow on total assets ratio
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(2) Compute the company's cash flow on total assets ratio for its fiscal year 2015.
IKIBAN INC. | ||||||||
2015 | 2014 | |||||||
Assets | ||||||||
Cash | $ | 96,500 | $ | 56,200 | ||||
Accounts receivable, net | 69,300 | 51,400 | ||||||
Inventory | 66,600 | 96,800 | ||||||
Prepaid expenses | 5,100 | 6,400 | ||||||
Total current assets | 237,500 | 210,800 | ||||||
Equipment | 135,200 | 120,000 | ||||||
Accum. depreciationâEquipment | (28,900 | ) | (10,500 | ) | ||||
Total assets | $ | 343,800 | $ | 320,300 | ||||
Liabilities and Equity | ||||||||
Accounts payable | $ | 26,900 | $ | 32,200 | ||||
Wages payable | 7,100 | 16,700 | ||||||
Income taxes payable | 2,500 | 4,100 | ||||||
Total current liabilities | 36,500 | 53,000 | ||||||
Notes payable (long term) | 42,000 | 70,000 | ||||||
Total liabilities | 78,500 | 123,000 | ||||||
Equity | ||||||||
Common stock, $5 par value | 240,000 | 189,000 | ||||||
Retained earnings | 25,300 | 8,300 | ||||||
Total liabilities and equity | $ | 343,800 | $ | 320,300 | ||||
IKIBAN INC. | ||||||
Sales | $ | 673,000 | ||||
Cost of goods sold | 407,000 | |||||
Gross profit | 266,000 | |||||
Operating expenses | ||||||
Depreciation expense | $ | 53,000 | ||||
Other expenses | 66,900 | |||||
Total operating expenses | 119,900 | |||||
| 146,100 | |||||
Other gains (losses) | ||||||
Gain on sale of equipment | 2,600 | |||||
Income before taxes | 148,700 | |||||
Income taxes expense | 59,480 | |||||
Net income | $ | 89,220 | ||||
a. A $28,000 note payable is retired at its $28,000 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 $63,800 cash.
d. Received cash for the sale of equipment that had cost $48,600, yielding a $2,600 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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(2) Compute the company's cash flow on total assets ratio for its fiscal year 2015.