Compute the amount of cash received from the sale of equipment. Cost of equipment sold Depreciation to date of equipment sold Book value of equipment sold Gain (loss) on sale of equipment Cash received from sale of equipment 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 At June 30 Assets Cash 24 25 26 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. IKIBAN INCORPORATED Comparative Balance Sheets Equity Common stock, $5 par value Retained earnings Total liabilities and equity 2023 $87,500 65,000 63,800 4,400 220,700 124,000 (27,000) $317,700 $25,000 6,000 3,400 34,400 30,000 64,400 220,000 33,300 $317,700 2022 $44,000 51,000 86,500 5,400 186,900 115,000 (9,000) $292,900 $30,000 15,000 3,800 48,800 60,000 108,800 160,000. 24,100 $292,900 7 3 9 0 $1 Sales Cost of goods sold Gross profit IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2023 Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income $678,000 411,000 267,000 67,000 58,600 141,400 2,000 143,400 43,890 $99,510 42 43 Additional Information 44 a. A $30,000 notes payable is retired at its $30,000 carrying (book) value in exchange for cash. 45 b. The only changes affecting retained earnings are net income and cash dividends paid. 46 c. New equipment is acquired for $57,600 cash. 47 e. Received cash for the sale of equipment that had cost $48,600, yielding a $2,000 gain. 48 1. Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement. 49 g. All purchases and sales of inventory are on credit. Cash paid for Equipment Equipment cost $57,600 $48,600 2 Required: 3 (2) Prepare a statement of cash flows using the indirect method for the year ended June 30, 2023. 45 7 Cash flows from operating activities 8 Net income $99,510 Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash 9 10 IKIBAN, INCORPORATED Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2023 11 12 13 Depreciation expense Gain on sale of equipment Changes in current operating assets and liabilities Increase in accounts receivable Decrease in inventory Decrease in prepaid expenses 14 15 16 17 18 19 20 Net cash provided by operating activities 21 Cash flows from investing activities 22 23 24 Decrease in accounts payable Decrease in wages payable Decrease in income taxes payable Cash received from sale of equipment Cash paid for equipment Net cash used in investing activities 25 Caph Aame from financina activation 58,600 (2,000) Select the proper amount from the Question Data tab. 22,700 1,000 (5,000) (9,000) (400) Cash flows from financing activities Cash received from stock issuance Cash paid to retire notes Cash paid for dividends 9 Net cash used in financing activities 7 8 50 Net increase (decrease) in cash 31 Cash balance at prior year-end 32 Cash balance at current year-end 33 34 35 60,000 (30,000)