using the direct method, the statement of cash flows for the year ended June 30t

Question

using the direct method, the statement of cash flows for the year ended June 30th, 2017.
a. a $30,000 note payable is retired at the its $30,000 carrying Book value in exchange for cash.
b. the only changes affecting retained earnings are net income and a cash dividends paid.
c. new equipment is acquired it for $57,600 cash.
d. received cash for the sale of equipment that had it cost for the $48600. Yielding a $2,000 gain.
e. prepaid expenses and wages payable relate to other expenses on the income statement.
f. all purchases and sales of the inventory are on credit.

The lewing information applies to the questions displayed below The folowing inanciel statements and additional information are reponed TKIBAN INC Conparative Balance Sheets Cash Accounts receivab Inventory Prepaid expenses Total current assets 87.seH. 44.000 386,500 220, 7098 Accun, depreciation-EquomentK279.) Total assets Liabilities and Equity Accounts payable Nages payable 174, 800 15996 $317,708$2929p8 s se, eee s 25,ee0 6 8ee 15 980 3,800 34-4004Bee 60,808 64 400 188 e 408a Income taxes payable Total current 11abllities Notes payable (long term) Total Iiabilities Equity Conmoni stock, $5 par value Retained earnings Total liebilities and equity 228,000168,888 24·10e $317 708 $292,998 IKIBAN EN Income Statenent For Year Ended June e 2a17 ales Cost of goods sold Gross profit Operating expenses $678,800 411 883 267,888 $58,680 67,908 Depreciation expense Other expenses Total operating expenses 125 60e 141 408 Other gains (losses) Gein on sale of equipnent Incone be fore taxes Incone toxes expense Net incose 143,400 43 s 99,510 o, A S30,000 note payoble retred at its S30,000 carrying poold value 'n exchange for oath. b. The only changes affecting retained earrings are net income and cash dividends paid c. New equipment is acquired for $57,600 cash. d. Received cash for the sale of eauDment that had cost S48600. vielino a S2000 ain.

Explanation / Answer

IKIBAN INC

Statement of cash flow (DIREct method)

for the period ended june 30 2017

**cash collection from customers =beginnin accounts receivable +sales -ending receivable

     =51000+678000-65000

      = 664000

**cash payment to supplier = cost of goods sold +ending inventory -beginning inventory +beginning accounts payable - ending accounts payable

= 411000+63800-86500+30000-25000

   =393300

**CASH paid for other expense = beginning wage payable + other expense-ending wage expense+ ending prepaid expense-beginning prepaid expense

      = 15000+67000-6000+4400-5400

     =75000

**taxes paid =beginning taxes payable +income tax payable -ending taxes payable

     =3800+43890-3400

    =44290

**Depreciation on equipment sold =beginning accumulated depreciation + depreciation expense- ending accumulated depreciation

=9000+58600-27000

= 40600

book value of equipment sold = 48600-40600 = 8000

sale value =book value +gain

            = 8000+2000

            = 1000

**dividend paid = beginning retained earning +net income -ending retained earning

      =24100+99510-33300

       =90310

**depreciation is a non cash expense

IKIBAN INC

Statement of cash flow (DIREct method)

for the period ended june 30 2017

cash flow from operating activity cash collection from customers 664000 cash payment to supplier (393300) cash payment for other expense 75000 taxes paid (44290) cash provided from operating activity [A] 151410 cash flow from investing activity purchase of equipment (57600) sale of equipment 10000 cash flow used by investing activity[B] (47600) cash flow from financing activity repayment of long term debt (30000) issue of common stock [220000-160000] 60000 dividend paid (90310) cash flow used by financing activity [c] (60310) Increase/(decrease) in cash [A+B+C] 43500 Beginning cash balance 44000 cash at end 87500

Related Questions

Navigate

• Browse (All)
• Browse U
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.