Required information Exercise 12-11 Indirect: Preparing statement of cash flows LO P2, P3, A1 [The following information applies to the questions displayed below.) The following financial statements and additional information are reported. 2018 IKIBAN INC. Comparative Balance Sheets June 30, 2019 and 2018 2019 Assets Cash $106,300 Accounts receivable, net 68,000 Inventory 65,800 Prepaid expenses 4,600 Total current assets 244,700 Equipment 126,000 Accum. depreciation-Equipment (28,000) Total assets $342,700 Liabilities and Equity Accounts payable $ 27,000 Wages payable 6, 200 Income taxes payable 3,600 Total current liabilities 36,800 Notes payable (long term) 32,000 Total liabilities 68,800 Equity Common stock, $5 par value 224,000 Retained earnings 49,900 Total liabilities and equity $342,700 $ 46,000 53,000 89,500 5,800 194,300 117,000 (10,000) $301,300 $ 33,000 15,400 4,200 52,600 62,000 114,600 162,000 24,700 $301,300 IKIBAN INC. Income Statement For Year Ended June 30, 2019 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $ 60, 600 Other expenses 69,000 Total operating expenses $688,000 413,000 275,000 129,600 145,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 2,200 147,600 44,090 $ 103,510 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 $59,600 cash. d. Received cash for the sale of equipment that had cost $50,600, yielding a $2,200 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. Exercise 12-11 Part 1 Required: (1) Prepare a statement of cash flows using the indirect method for the year ended June 30, 2019. (Amounts to be deducted should be indicated with a minus sign.) aed June 30, Cash flows from operating activities Net income $ 103,510 Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Depreciation expense 60,600 Gain on sale of plant assets (2,200) Changes in current operating assets and liabilities Increase in accounts receivable (14,000) Decrease in inventory $ 147,910 Cash flows from investing activities 0 Cash flows from financing activities Dron