Required information Exercise 12-11 Indirect: Preparing statement of cash flows LO P1, P2, P3, A1 [The following information applies to the questions displayed below.] The following financial statements and additional information are reported IKIBAN INC. Comparative Balance Sheets June 30, 2017 and 2016 2017 2016 Assets Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets $93,700 67,000 74,000 121,000 10,000 272,000 138,000 99,500 86,800 6,700 286,700 147,000 (38,500) (20,500) $395,200 389,500 Liabilities and Equity Accounts payable Wages payable Income taxes payable Total current liabilities Notes payable (long term) Total liabilities Equity 48,000 64,500 19,600 8,400 92,500 53,00083,000 175,500 8,300 5,700 62,000 115,000 stock, $5 par value 183,000 31,000 $395,200 389,500 266,000 14,200 Retained earnings Total liabilities and equity IKIBAN INC. Income Statement For Year Ended June 30, 2017 $793,000 434,000 359,000 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $81,600 90,000 Other expenses Total operating expenses 171,600 187,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 4,300 191,700 46,190 $145,510 Additional Informationn 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 $80,600 cash d. Received cash for the sale of equipment that had cost $71,600, yielding a $4,300 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, 2017 Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Changes in current operating assets and liabilities 0 Cash flows from investing activities 0 Cash flows from financing activities 0 Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end 0 0