Question

Additional Information A $30,000 note payable is retired at its $30,000 carrying (book) value in exchange for cash. The only changes affecting retained earnings are net income and cash dividends paid. New equipment is acquired for $57,600 cash. Received cash for the sale of equipment that had cost $48,600, yielding a $2,000 gain. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement. All purchases and sales of inventory are on credit. Exercise 16-11 Part 1 Required: (1) Prepare a statement of cash flows for the year ended June 30, 2017, using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

Answer 1

the initial information is missing, but I found a similar question that you can use as an example:

Ikiban Inc.

Statement of Cash flows

For the Year Ended June 30, 2017

Cash flow from operating activities:

Net income $117,510

Adjustments to net income:

• Depreciation expense $67,600
• Decrease in inventory $27,200
• Decrease in prepaid expenses $1,900
• Increase in accounts receivable ($18,500)
• Gain from sale of equipment ($2,000)
• Decrease in accounts payable ($9,500)
• Decrease in wages payable ($9,900)
• Decrease in taxes payable ($2,800) $54,000

Net cash flow from operating activities $171,510

Cash flow from investing activities:

Purchase of new equipment ($57,600)

Disposal of old equipment $48,600

Net cash flow from investing activities ($9,000)

Cash flow from financing activities:

Issuance of common stock $69,000

Retirement of note payable ($30,000)

Distributed dividends ($106,310)

Net cash flow from financing activities ($67,310)

Net cash increase $95,200

Cash balance June 30, 2016 $53,000

Cash balance June 30, 2017 $148,200