IKIBAN INC. Comparative Balance Sheets June 30, 2017 and 2016
	2017				2016
Assets
Cash	$	98,500			$	59,000
Accounts receivable, net		87,500				66,000
Inventory		78,800				109,000
Prepaid expenses		5,900				8,400
Total current assets		270,700				242,400
Equipment		139,000				130,000
Accum. depreciationEquipment		(34,500	)			(16,500	)
Total assets	$	375,200			$	355,900
Liabilities and Equity
Accounts payable	$	40,000			$	52,500
Wages payable		7,500				18,000
Income taxes payable		4,900				6,800
Total current liabilities		52,400				77,300
Notes payable (long term)		45,000				75,000
Total liabilities		97,400				152,300
Equity
Common stock, $5 par value		250,000				175,000
Retained earnings		27,800				28,600
Total liabilities and equity	$	375,200			$	355,900

IKIBAN INC. Income Statement For Year Ended June 30, 2017
Sales				$	753,000
Cost of goods sold					426,000
Gross profit					327,000
Operating expenses
Depreciation expense	$	73,600
Other expenses		82,000
Total operating expenses					155,600
					171,400
Other gains (losses)
Gain on sale of equipment					3,500
Income before taxes					174,900
Income taxes expense					45,390
Net income				$	129,510

1. A $30,000 note payable is retired at its $30,000 carrying (book) value in exchange for cash.
2. The only changes affecting retained earnings are net income and cash dividends paid.
3. New equipment is acquired for $72,600 cash.
4. Received cash for the sale of equipment that had cost $63,600, yielding a $3,500 gain.
5. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.
6. All purchases and sales of inventory are on credit.
7. Using the Indirect Method