Exercise $12-12($Algo$)$ Indirect: Preparing statement of cash flows LO P$2,$ P$3,$ A$1$

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$[$The following information applies to the questions displayed below.$]$

The following financial statements and additional information are reported.

IKIBAN INCORPORATED

Comparative Balance Sheets

At June $3020212020$

Assets

Cash $ $105,100$ $ $48,000$

Accounts receivable, net $71,00055,000$

Inventory $67,80092,500$

Prepaid expenses $4,8006,200$

Total current assets $248,700201,700$

Equipment $128,000119,000$

Accumulated depreciation$$Equipment $(29,000)(11,000)$

Total assets $ $347,700$ $ $309,700$

Liabilities and Equity

Accounts payable $ $29,000$ $ $36,000$

Wages payable $6,40015,800$

Income taxes payable $3,8004,600$

Total current liabilities $39,20056,400$

Notes payable $($long term$)34,00064,000$

Total liabilities $73,200120,400$

Equity

Common stock, $$5$ par value $228,000164,000$

Retained earnings $46,50025,300$

Total liabilities and equity $ $347,700$ $ $309,700$

IKIBAN INCORPORATED

Income Statement

For Year Ended June $30,2021$

Sales $ $698,000$

Cost of goods sold $415,000$

Gross profit $283,000$

Operating expenses $($excluding depreciation$)71,000$

Depreciation expense $62,600$

$149,400$

Other gains $($losses$)$

Gain on sale of equipment $2,400$

Income before taxes $151,800$

Income taxes expense $44,290$

Net income $ $107,510$

Additional Information

A $$30,000$ notes payable is retired at its $$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 $$61,600$ cash.

Received cash for the sale of equipment that had cost $$52,600,$ yielding a $$2,400$ gain.

Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement.

All purchases and sales of inventory are on credit.

Exercise $12-12($Algo$)$ Part $1$

Required:

$(1)$ Prepare a statement of cash flows using the indirect method for the year ended June $30,2021.$

Note: Amounts to be deducted should be indicated with a minus sign.