IKIBAN INCORPORATED Comparative Balance Sheets At June 30 Assets Cash Accounts receivable, net Prepaid expenses 2021 $ 104,500 72,500 Inventory Total current assets. Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity 68,800 2020 $ 49,000 56,000 94,000. 4,900 6,400 250,700 205,400 129,000 (29,500) $ 350,200 Accounts payable $ 30,000 Wages payable 6,500 Income taxes payable 3,900 120,000 (11,500) $ 313,900 $ 37,500 16,000 4,800 Total current liabilities 40,400 58,300 Notes payable (long term) 35,000 65,000 Total liabilities 75,400 123,300 Equity Common stock, $5 par value. 230,000 165,000 Retained earnings 44,800 25,600 Total liabilities and equity $350,200 $ 313,900 Sales IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 $ 703,000 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. 416,000 287,000 72,000 63,600 151,400 2,500 153,900 44,390 $ 109,510 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 $62,600 cash. d. Received cash for the sale of equipment that had cost $53,600, yielding a $2,500 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. 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 Net income 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 $ 109,51 Depreciation expense Decrease in accounts payable 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 payable Cash flows from investing activities Cash received from sale of equipment Cash paid for equipment Cash flows from financing activities Cash paid for dividends Cash paid to retire notes Cash received from stock issuance Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end 29.50