connect ch-16

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The following financial statements and additional information are reported.

IKIBAN INC. Comparative Balance Sheets June 30, 2013 and 2012
	2013			2012
Assets
Cash	$	106,500		$	61,100
Accounts receivable, net		69,100			51,100
Inventory		66,200			96,000
Prepaid expenses		6,100			5,100
Equipment		125,900			114,000
Accum. depreciation—Equipment		(28,900	)		(10,100	)

Total assets	$	344,900		$	317,200

Liabilities and Equity
Accounts payable	$	26,300		$	32,100
Wages payable		7,900			16,700
Income taxes payable		2,600			3,500
Notes payable (long term)		46,000			73,000
Common stock, $5 par value		237,000			184,000
Retained earnings		25,100			7,900

Total liabilities and equity	$	344,900		$	317,200

IKIBAN INC. Income Statement For Year Ended June 30, 2013
Sales			$	676,000
Cost of goods sold				404,000

Gross profit				272,000
Operating expenses
Depreciation expense	$	58,600
Other expenses		66,500

Total operating expenses				125,100

				146,900
Other gains (losses)
Gain on sale of equipment				2,800

Income before taxes				149,700
Income taxes expense				59,880

Net income			$	89,820

Additional Information

a.	A $27,000 note payable is retired at its $27,000 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 $60,800 cash.
d.	Received cash for the sale of equipment that had cost $48,900, yielding a $2,800 gain.
e.	Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.
f.	All purchases and sales of merchandise inventory are on credit.

rev: 10_03_2013_QC_36920

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