! Required information Exercise 12-12 (Algo) 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. IKIBAN INCORPORATED Comparative Balance Sheets At June 30 Assets Cash Accounts receivable, net Inventory Prepaid expenses 2021 2020 $ 100,300 $ 56,000 83,000 75,800 63,000 104,500 5,600 7,800 Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity 264,700 231,300 136,000 (33,000) $ 367,700 Accounts payable Wages payable Income taxes payable $ 37,000 Total current liabilities 7,200 4,600 48,800 127,000 (15,000) $ 343,300 $ 48,000 17,400 6,200 71,600 Notes payable (long term) 42,000 72,000 Total liabilities 90,800 143,600 Equity Common stock, $5 par value 244,000 172,000 Retained earnings 32,900 27,700 $ 367,700 $ 343,300 Total liabilities and equity Sales Cost of goods sold IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income $ 738,000 423,000 315,000 79,000 70,600 165,400 3,200 168,600 45,090 $ 123,510 Additional Information 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 $69,600 cash. d. Received cash for the sale of equipment that had cost $60,600, yielding a $3,200 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. Exercise 12-12 (Algo) Part 1 Required: (1) 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.) CORPORATED Cash flows from operating activities 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 Changes in current operating assets and liabilities Cash flows from investing activities Cash flows from financing activities Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end