IKIBAN INC. Comparative Balance Sheets June 30, 2013 and 2012 2013 2012 Assets Cash $ 87,500 $ 44,000 Accounts receivable, net 65,000 51,000 Inventory 63,800 86,500 Prepaid expenses 4,400 5,400 Equipment 124,000 115,000 Accum. depreciationEquipment (27,000 ) (9,000 ) Total assets $ 317,700 $ 292,900 Liabilities and Equity Accounts payable $ 25,000 $ 30,000 Wages payable 6,000 15,000 Income taxes payable 3,400 3,800 Notes payable (long term) 30,000 60,000 Common stock, $5 par value 220,000 160,000 Retained earnings 33,300 24,100 Total liabilities and equity $ 317,700 $ 292,900 IKIBAN INC. Income Statement For Year Ended June 30, 2013 Sales $ 678,000 Cost of goods sold 411,000 Gross profit 267,000 Operating expenses Depreciation expense $ 58,600 Other expenses 67,000 Total operating expenses 125,600 141,400 Other gains (losses) Gain on sale of equipment 2,000 Income before taxes 143,400 Income taxes expense 43,890 Net income $ 99,510 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 $57,600 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 merchandise inventory are on credit.

The following financial statements and additional information are reported. IKIBAN INC Comparative Balance Sheets June 30, 2013 and 2012 2013 2012 Assets Cash Accounts receivable, net $ 87,500 44,000 51,000 86,500 65,000 63.800 Prepaid expenses Equipment Accum. depreciation-Equipment 4.400 124,000 (27,000) 5.400 115,000 (9,000) Total assets $317700 $292,900 Liabilities and Equity Accounts payable Wages payable Income taxes payable Notes payable long term) Common stock, $5 par value Retained earnings $ 25,000 30,000 5,000 3,800 60,000 160,000 24,100 6,000 3.400 30,000 220,000 33.300 Total liabilities and equity $317700 $292,900 IKIBAN INC. Income Statement For Year Ended June 30, 2013 Sales Cost of goods sold $678,000 411,000 267,000 Gross profit Operating expenses Depreciation expense Other expenses $58,600 67,000 125,600 141.400 2,000 143.400 Total operating expenses Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense 43.890 Net income $ 99,510 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 $57,600 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 merchandise inventory are on credit