Exercise 16-1 [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 Prepaid expenses Inventory 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 Total liabilities and equity 2021 2020 $ 100,900 81,500 $ 55,000 74,800 62,000 103,000 5,500 7,600 262,700 227,600 135,000 (32,500) $ 365,200 $ 36,000 7,100 126,000 (14,500) $ 339,100 $ 46,500 17,200 6,000 69,700 4,500 47,600 41,000 71,000 88,600 140,700 242,000 34,600 171,000 27,400 $ 365,200 $ 339,100 Sales IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses). Gain on sale of equipment Income before taxes Income taxes expense Net income Additional Information $ 733,000 422,000 311,000 78,000 69,600 163,400 3,100 166,500. 44,990 $121,510 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 $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 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. (Amounts to be deducted should be indicated with a minus sign.) Cash flows from operating activities 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 Changes in current operating assets and liabilities 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