At June 30	2021	2020
Assets
Cash	$ 93,700	$ 67,000
Accounts receivable, net	99,500	74,000
Inventory	86,800	121,000
Prepaid expenses	6,700	10,000
Total current assets	286,700	272,000
Equipment	147,000	138,000
Accumulated depreciationEquipment	(38,500)	(20,500)
Total assets	$ 395,200	$ 389,500
Liabilities and Equity
Accounts payable	$ 48,000	$ 64,500
Wages payable	8,300	19,600
Income taxes payable	5,700	8,400
Total current liabilities	62,000	92,500
Notes payable (long term)	53,000	83,000
Total liabilities	115,000	175,500
Equity
Common stock, $5 par value	266,000	183,000
Retained earnings	14,200	31,000
Total liabilities and equity	$ 395,200	$ 389,500

IKIBAN INCORPORATED
Income Statement
For Year Ended June 30, 2021
Sales	$ 793,000
Cost of goods sold	434,000
Gross profit	359,000
Operating expenses (excluding depreciation)	90,000
Depreciation expense	81,600
	187,400
Other gains (losses)
Gain on sale of equipment	4,300
Income before taxes	191,700
Income taxes expense	46,190
Net income	$ 145,510

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 $80,600 cash.

Received cash for the sale of equipment that had cost $71,600, yielding a $4,300 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. (Amounts to be deducted should be indicated with a minus sign.)