27 Required information Exercise 12-12 (Algo) Indirect: Preparing statement of cash flows LO P2, P3, A1 (The following information applies to the questions displayed below.) The following financial statements and additional information are reported. Part 1 of 2 3.33 points 2019 eBook References IKIBAN INC. Comparative Balance Sheets At June 30 2020 Assets Cash $ 101,500 Accounts receivable, net 80,000 Inventory 73,800 Prepaid expenses 5, 400 Total current assets 260, 700 Equipment 134,000 Accum. depreciation-Equipment (32,000) Total assets $362, 700 Liabilities and Equity Accounts payable $ 35,000 Wages payable 7,000 Income taxes payable 4,400 Total current liabilities 46,400 Notes payable (long term) 40,000 Total liabilities 86,400 Equity Common stock, $5 par value 240,000 Retained earnings 36,300 Total liabilities and equity $362,700 $ 54,000 61,000 101,500 7,400 223,900 125,000 (14,000) $ 334,900 $ 45,000 17,000 5,800 67,800 70,000 137,800 170,000 27,100 $334,900 IKIBAN INC. Income Statement For Year Ended June 30, 2020 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense $ 728,000 421,000 307,000 77,000 68,600 161,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 3,000 164,400 44,890 $ 119,510 Additional Information a. A $30,000 note payable is retired at its $30,000 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 $67,600 cash. d. Received cash for the sale of equipment that had cost $58,600, yielding a $3,000 gain. e. Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement. f. All purchases and sales of inventory are on credit