Exercise 12-11 Indirect: Preparing statement of cash flows LO P1, P2, P3, A1 [The following information applies to the questions displayed below.] The following financial statements and additional information are reported. IKIBAN INC Comparative Balance Sheets June 30, 2017 and 2016 2017 2016 Assets Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets $87,500 44,000 51,000 86, 500 5,400 220,700 186,9e0 124,000 115,000 9,000 65,000 63,800 4,400 (27, e0e $317,70e $292,900 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 Total liabilities and equity $ 25,000 30,e00 15,000 3,800 48,800 60,000 64,400 108,800 6,000 3,400 34,400 30,00068 220,000 160,0ee 33,300 24 186 $317,700 292,900 IKIBAN INC. Income Statement For Year Ended June 30, 2017 Sales Cost of goods sold Gross profit Operating expenses $678,000 411,000 267,000 Depreciation expense Other expenses Total operating expenses $58,600 67,000 125,600 141,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 2,000 143,400 43,890 $ 99,51e 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 $57600 cash. d. Received cash for the sale of equipment that had cost $48,600, yielding a $2,000 gain e. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement f. All purchases and sales of inventory are on credit. (1) Prepare a statement of cash flowis for the year ended June 30. 2017, using the indirect method (Amounts to be deducted should be indicated with a minus sign.) Required: Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2017 Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Changes in current operating assets and liabilities Cash flows from investing activities Cash flows from financing activities Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end