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 Prepaid expenses Inventory Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Wages payable Income taxes payable Total current liabilities: Notes payable (long term) Total liabilities Equity 2021 2020 $ 96,100 93,500 $ 63,000 82,800 70,000 115,000 6,300 9,200 278,700 257,200 143,000 (36,500) $ 385,200 134,000 (18,500) $ 372,700 $ 58,500 $ 44,000 7,900 5,300 18,800 7,600 57,200 84,900 49,000 79,000 106,200 163,900 258,000 21,000 179,000 29,800 Total liabilities and equity $ 385,200 $ 372,700 IKIBAN INCORPORATED Income Statement Common stock, $5 par value Retained earnings Sales For Year Ended June 30, 2021 $ 773,000 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 430,000 343,000 86,000 77,600 179,400 3,900 183,300 45,798 $ 137,510 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 $76,600 cash. d. Received cash for the sale of equipment that had cost $67,600, yielding a $3,900 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. Required information. Required: (1) Prepare a statement of cash flows using the indirect method for the year ended June 30, 2021. Note: Amounts to be deducted should be indicated with a minus sign. 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