Exercise 12-17B Direct: Preparing statement of cash flows LO P5 The following financial statements and additional information are reported. IKIBAN INC. Comparative Balance Sheets June 30, 2019 and 2018 2019 2018 $ 80,900 81,500 74,800 5,500 242,700 135,000 (32,500) $345,200 $ 55,000 62,000 103,000 7,600 227, 602 126,000 (14,500) $339,100 Assets Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accum. 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 Total liabilities and equity $ 36,000 7,100 4,500 47,600 32,200 79,800 $ 46,500 17,200 6,000 69, 700 71,000 140,700 242,000 23,400 $345,200 171,000 27 400 $339, 100 IKIBAN INC. Income Statement For Year Ended June 30, 2019 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $69,600 Other expenses 78,000 Total operating expenses $733,000 422,000 311,000 147,600 163,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 3,100 166,500 44,990 $121,510 Additional Information a. A $38,800 note payable is retired at its $38,800 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 Other Expenses on the income statement. f. All purchases and sales of inventory are on credit