Exercise 16-12 (Algo) Indirect: Preparing statement of cash flows LO P2, P3, A1 [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 2021 2020 $ 95,500 95,000 $ 64,000 83,800 71,000 116,500 6,400 9,400 280,700 260,900 Accounts payable Wages payable 144,000 (37,000) $ 387,700 $ 45,000 8,000 135,000 (19,000) $ 376,900 $ 60,000 19,000 Income taxes payable 5,400 7,800 Total current liabilities 58,400 86,800 Notes payable (long term) 50,000 80,000 Total liabilities 108,400 166,800 Equity Common stock, $5 par value 260,000 180,000 19,300 30,100 $ 387,700 $ 376,900 Retained earnings Total liabilities and equity Sales IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 Cost of goods sold $ 778,000 431,000 347,000 87,000 Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income Additional Information 78,600 181,400 4,000 185,400 45,890 $ 139,510 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 $77,600 cash. d. Received cash for the sale of equipment that had cost $68,600, yielding a $4,000 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.