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 2016 2017 Assets Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets $ 97,300 61,000 68,000 112,000 8,800 249,800 132,000 90,500 80,800 6,100 274,700 141,000 35,50 (17,500) $380,200 $364,300 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 $. 42,000 7,700 5,100 54,800 47,000 101,800 55,500 18,400 7,200 81,100 77,000 158,100 177,000 29,200 $380,200$364,300 254,000 24,400 Total liabilities and equity IKIBAN INC. Income Statement For Year Ended June 30, 2017 Sales Cost of goods sold Gross profit Operating expenses $763,000 428,000 335,00e Depreciation expense Other expenses $75,600 84,000 Total operating expenses 159,600 175,400 Other gains (losses) Gain on sale of equipment 3,700 Income before taxes Income taxes expense Net income 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 Required information Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Depreciation expense Gain on sale of plant assets Increase in accounts receivable Changes in current operating assets and liabilities Decrease in inventory Decrease in prepaid expenses Decrease in accounts payable Decrease in wages pavable Decrease in income taxes payable 75,600 (3,700) (22,500) 31,200 2,700 13,500 10,700 2,100 Net cash provided by operating activities Cash flows from investing activities 243,110 Cash received from sale of equipment Cash paid for equipment Net cash used in investing activities Cash flows from financing activities Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end 243.110 243.110