June 30, 2017 and 2016 Assets Cash Accounts receivable, net Inventory Prepaid ex
ID: 2544966 • Letter: J
Question
June 30, 2017 and 2016 Assets Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets s 99,760 57,00 64,800 106,800 8,000 235,800 137,600 128,000 84,580 76,880 5,700 266,7005 00 (33,500) (15,5e0) $370,200 $347,500 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 Total liabilities and equity 38,680 49,580 17,600 6,400 73,500 73,000 146,500 7,300 4,700 50,800 2.9991 93,000 173,000 31,20028-888 246,000 28,000 $370,200 $347,500 IKIBAN INC. Income Statement For Year Ended June 3e, 2017 Sales Cost of goods sold Gross profit Operating expenses $743,000 424,000 319,000 Deprecietion expense $71,600 Other expenses Total operating expenses 151,600 167,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 170,700 45,190 5125,510 Additional Information o. A $30000 note payable is retired at its $30,000 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 $70.600 cash d. Receivea cash for the sale of equipment that had cos: $61600, yielding a $3.300 gairn e. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement f. All purchases and sales of inventory are on crecitExplanation / Answer
Working:
1. Cash dividends paid = Beginning balance of retained earnings + Net income - Ending balance of retained earnings = $28000 + $125510 - $31200 = $122310
2. Sale proceeds from equipment:
Accumulated depreciation reversed on equipment sold = Beginning balance of Accumulated depreciation + Depreciation expense - Ending balance of Accumulated depreciation = $15500 + $71600 - $33500 = $53600
Book value of equipment sold = Cost - Accumulated depreciation = $61600 - $53600 = $8000
Sale proceeds = Book value + Gain on sale = $8000 + $3300 = $11300
IKIBAN INC. Statement of Cash Flows (Indirect Method) For the Year Ended June 30, 2017 Cash Flows from Operating Activities Net income 125510 Adjustments to reconcile net income to net cash provided by operations: Depreciation expense 71600 Gain on sale of equipment -3300 Increase in Accounts Receivable -20500 Decrease in Inventory 29200 Decrease in Prepaid expenses 2300 Decrease in Accounts payable -11500 Decrease in Wages payable -10300 Decrease in Income taxes payable -1700 55800 Net cash provided by operating activities 181310 Cash Flows from Investing Activities Purchase of equipment -70600 Sale proceeds from equipment 11300 Net cash used by investing activities -59300 Cash Flows from Financing Activities Retirement of note payable -30000 Issuance of Common stock 73000 Payment of cash dividends -122310 Net cash used by financing activities -79310 Net increase (decrease) in cash 42700 Cash balance, June 30, 2016 57000 Cash balance, June 30, 2017 99700Related Questions
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