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 $$68,600$ cash.

D$)-$Received cash for the sale of equipment that had cost $$59,600,$ yielding a $$3,100$ 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.

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

Required:

$(1)$ Prepare a statement of cash flows using the indirect method for the year ended June $30,2020.$