me onowing mormsuor appues to ne quesions dispiayed berow The following financia
ID: 2585697 • Letter: M
Question
me onowing mormsuor appues to ne quesions dispiayed berow The following financial statements and additional information are reported. IKIBAN ING Comparative Balance Sheets June 30, 2015 and 2014 2015 2014 Assets Cash Accounts receivable, net Inventory Prepaid expenses $110,300 55,500 51,200 96,700 5,900 69,400 66,200 4,600 Total current assets Equipment Accum depreciation-Equipment 250,500 130,000 (28,600) 209,300 119,000 (10,200) Total assets $351,900 $318,100 Liabilities and Equity Accounts payable Wages payable Income taxes payable $26,900$32,900 6,600 4.000 7,300 2,300 Total current liabilities Notes payable (long term) 36,500 52,000 53,500 72,000 Total liabilities Equity Common stock, $5 par value Retained earnings 88,500 125,500 238,000185,00o 7,600 25,400 Total liabilities and equity 351,900 $318,100Explanation / Answer
(1)
Prepare the statement of cash flow as follows:
(2)
Cash flow on total assets ratio
= Cash flows from operations/Average total assets
= 137,040/[(351,900+318,100)/2]
= 0.41
IKIBAN INC. Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2015 Cash flows from operating activities: Net income 85440 Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Depreciation expense 57800 Gain on sale of equipment -2800 Changes in current operating assets and liabilities Increase in accounts receivable (69,400 - 51,200) -18200 Decrease in inventory (96,700 - 66,200) 30500 Decrease in prepaid expenses (5,900 - 4,600) 1300 Decrease in accounts payable (32,900 - 26,900) -6000 Decrease in wages payable (16,600 - 7,300) -9300 Decrease in income taxes payable (4,000 - 2,300) -1700 Net cash provided by operating activities 137040 Cash flows from investing activities: Cash paid to acquire new equipment -60300 Cash received from sale of equipment (49,300 - 39,400 + 2,800) 12700 Net cash used in investing activities -47600 Cash flows from financing activities: Cash paid to retire notes payable -20000 Dividends paid (7,600 + 85,440 - 25,400) -67640 Cash received from issuance of common stock (238,000 - 185,000) 53000 Net cash used in financing activities -34640 Net increase in cash 54800 Cash balance at prior year-end 55500 Cash balance at current year-end 110300Related Questions
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