Prepare a statement of cash flows for the year ended June 30, 2017, using the in

Question

Prepare a statement of cash flows for the year ended June 30, 2017, using the indirect method.

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 55,000 62,000 103,000 7,600 227,600 126,000 $100,900 81,500 74,800 5,500 262,700 135,000 32,500) (14.500) $365,200 $339,100 Liabilities and Equity Accounts payable Wages payable Income taxes payable Total currentliabilities Notes payable (long term) Total liabilities Equity Common stock, $5 par value Retained earnings $ 36,000 7,100 4,500 47,600 41,000 88,600 46,500 17,200 6,000 69,700 71,000 140,700 171,000 27,400 $365,200 $339,100 242,000 34,600 Total liabilities and equity

Explanation / Answer

Cash flow from operations Net income $          121,510 Add: depreciation $            69,600 Less: Gain on sale of investment $            (3,100) Less: Increase in account receivables $          (19,500) Add: Decrease in inventory $            28,200 Add: Decrease in prepaid expenses $              2,100 Less: Decrease in accounts payable $          (10,500) Less: Decrease in wages payable $          (10,100) Less: Decrease in income taxes payable $            (1,500) Cash flow from operations (A) $          176,710 Cash flow from investing activities Purchase of new equipment $          (68,600) Sale of equipment $            11,100 Cash flow from investing activities (B) $          (57,500) Cash flow from financing activities Dividend paid $       (114,310) Issuance of common stock $            71,000 Notes payable $          (30,000) Cash flow from financing activities © $          (73,310) Total cash flows (A+B+C) $            45,900 Opening cash balance $            55,000 Closing cash balance $          100,900

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