[The following information applies to the questions displayed below.]
| The following financial statements and additional information are reported. |
| IKIBAN INC. Comparative Balance Sheets June 30, 2013 and 2012 |
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| 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 | ) | ||||
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| Total assets | $ | 344,900 | $ | 317,200 | ||||
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| 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 | ||||||
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| Total liabilities and equity | $ | 344,900 | $ | 317,200 | ||||
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| IKIBAN INC. Income Statement For Year Ended June 30, 2013 |
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| Sales | $ | 676,000 | ||||
| Cost of goods sold | 404,000 | |||||
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| Gross profit | 272,000 | |||||
| Operating expenses | ||||||
| Depreciation expense | $ | 58,600 | ||||
| Other expenses | 66,500 | |||||
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| Total operating expenses | 125,100 | |||||
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| 146,900 | ||||||
| Other gains (losses) | ||||||
| Gain on sale of equipment | 2,800 | |||||
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| Income before taxes | 149,700 | |||||
| Income taxes expense | 59,880 | |||||
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| Net income | $ | 89,820 | ||||
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| 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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