Check my work mode: THIS SHOWS [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 30 Assets Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Wages payable Income taxes payable Total current liabilities Notes payable (long term) Total liabilities Equity Common stock, $5 par value Retained earnings 2021 2020 $ 100,300 83,000 $ 56,000 75,800 63,000 104,500 5,600 7,800 264,700 231,300 136,000 (33,000) $ 367,700 127,000 (15,000) $ 343,300 $ 48,000 17,400 6,200 $ 37,000 7,200 4,600 48,800 71,600 42,000 72,000 90,800 143,600 244,000 172,000 32,900 27,700 Total liabilities and equity $ 367,700 $343,300 IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 Sales Cost of goods sold $ 738,000 423,000 Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 315,000 79,000 70,600 165,400 3,200 168,600 45,090 $123,510 4 1 of 2 Other gains (losses) Gain on sale of equipment Income before taxes) 165,400 3,200 168,600 Income taxes expense Net income Additional Information 45,090 $123,510 a. A $30,000 notes 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 $69,600 cash. d. Received cash for the sale of equipment that had cost $60,600, yielding a $3,200 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. 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. Cash flows from operating activities Net income Answer is not complete. IKIBAN, INCORPORATED Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2021 Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Depreciation expense Gain on sale of plant assets Decrease in accounts receivable Changes in current operating assets and liabilities 100 $123,510 70,600 (3,200) (20,000) Required information Depreciation expense Gain on sale of plant assets 2 Decrease in accounts receivable Changes in current operating assets and liabilities Cash flows from investing activities Cash flows from financing activities 70,600 (3,200) (20,000) 170,910 Net increase (decrease) in cash Cash balance at prior year-end 0 S 170,910 Cash balance at current year-end S 170,910 0