Exercise 16-10 Indirect: Preparation of statement of cash flows - IKIBAN INC.

The following financial statements and additional information are reported.

IKIBAN INC. Comparative Balance Sheets June 30, 2013 and 2012
	2013			2012
Assets
Cash	$	100,400		$	61,900
Accounts receivable, net		69,900			51,200
Inventory		66,000			96,600
Prepaid expenses		6,200			5,100
Equipment		127,200			115,000
Accum. depreciation—Equipment		(29,000	)		(10,500	)

Total assets	$	340,700		$	319,300

Liabilities and Equity
Accounts payable	$	26,100		$	32,800
Wages payable		7,600			16,500
Income taxes payable		2,700			4,200
Notes payable (long term)		44,000			70,000
Common stock, $5 par value		235,000			188,000
Retained earnings		25,300			7,800

Total liabilities and equity	$	340,700		$	319,300

IKIBAN INC. Income Statement For Year Ended June 30, 2013
Sales			$	671,000
Cost of goods sold				405,000

Gross profit				266,000
Operating expenses
Depreciation expense	$	58,200
Other expenses		66,800

Total operating expenses				125,000

				141,000
Other gains (losses)
Gain on sale of equipment				2,500

Income before taxes				143,500
Income taxes expense				57,400

Net income			$	86,100

Additional Information

a.	A $26,000 note payable is retired at its $26,000 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 $61,600 cash.
d.	Received cash for the sale of equipment that had cost $49,400, yielding a $2,500 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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