Required information The following information applies to the questions displaye

Question

Required information The following information applies to the questions displayed below.] The following financial statements and additional information are reported IKIBAN INC Comparative Balance Sheets June 30, 2017 and 2016 2017 2016 Assets Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets 49,000 56,000 94,000 6,400 205,400 120,000 $104,500 72,500 68,800 4,900 250,700 129,000 29,500) (11,500) $350,200 $313,900 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 $ 30,000 37,500 16,000 4,800 58,300 65,000 123,300 6,500 3,900 40,400 35,000 75,400 165,000 25,600 $350,200 313,900 230,000 44,800 Total liabilities and equity IKIBAN INC Income Statement

Explanation / Answer

IKIBAN, INC. Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2017 Cash flows from operating activities Net income $109,510 Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Depreciation expense 63,600 Gain on sale of plant assets -2,500 Changes in current operating assets and liabilities Increase in accounts receivable -16,500 Decrease in inventory 25,200 Decrease in prepaid expenses 1,500 Decrease in accounts payable -7,500 Decrease in wages payable -9,500 Decrease in income taxes payable -900 Net cash provided by operating activities 162,910 Cash flows from investing activities Cash received from sale of equipment 10,500 Cash paid for equipment -62,600 Net cash used in investing activities -52100 Cash flows from financing activities Cash received from stock issuance 65,000 Cash paid to retire notes -30,000 Cash paid for dividends -90,310 Net cash used in financing activities -55310 Net increase (decrease) in cash 55,500 Cash balance at prior year-end 49,000 Cash balance at current year-end 104,500

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