IKIBAN INC. Comparative Balance Sheets June 30, 2019 and 2018 2019 2018 $ 97,300 90,500 80,800 6,100 274,700 141,000 (35,500) $380,200 $ 61,000 68,000 112,000 8,800 249,800 132,000 (17,500 $364,300 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 $ 42,000 7,700 5,100 54,800 47,000 101,800 $ 55,500 18,400 7,200 81,100 77,000 158, 100 254,000 24,400 $380,200 177,000 29,200 $364,300 IKIBAN INC. Income Statement For Year Ended June 30, 2019 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $75,600 Other expenses 84,000 Total operating expenses $763,000 428,000 335,000 159,600 175,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 3,700 179,100 45,590 $133,510 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 $74,600 cash. d. Received cash for the sale of equipment that had cost $65,600, yielding a $3,700 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. IKIBAN, INC Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2019 Cash flows from operating activities Net income S 133 510 Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Depreciation expense 75,600 Changes in current operating assets and liabilities Increase in accounts receivable Decrease in inventory Decrease in prepaid expenses Decrease in accounts payable Decrease in wages payable Decrease in income taxes payablo Gain on sale of plant assets Net cash provided by operating activities Cash flows from investing activities Cash received from sale of equipment (22.500) 31200 2.700 (13,500) (10 700) (5.100) (3.700) $ 187 510 (10,700) (5,100) (3,700) $ 187,510 Decrease in wages payable Decrease in income taxes payable Gain on sale of plant assets Net cash provided by operating activities Cash flows from investing activities Cash received from sale of equipment Cash paid for equipment 69,300 (74,600) (5,300) Net cash used in investing activities Cash flows from financing activities Cash paid to retire notes Cash received from stock issuance (30,000) (77,000) $ $ Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end (107,000) 75,210 61,000 136,210 $ $