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 2021 2020 $ 94,300 98,000 $ 66,000 85,800 73,000 119,500 6,600 9,800 284,700 146,000 (38,000) $ 392,700 Accounts payable $ 47,000 Wages payable 8,200 Income taxes payable 5,600 268,300 137,000 (20,000) $ 385,300 $ 63,000 19,400 8,200 Total current liabilities 60,800 90,600 Notes payable (long term) 52,000 82,000 Total liabilities Equity 112,800 172,600 Common stock, $5 par value 264,000 182,000 Retained earnings 15,900 30,700 Total liabilities and equity $ 392,700 $ 385,300 Sales Cost of goods sold Gross profit IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 $ 788,000 433,000 355,000 89,000 80,600 185,400 4,200 Operating expenses (excluding depreciation) Depreciation expense Other gains (losses). Gain on sale of equipment Income before taxes Income taxes expense Net income Additional Information 189,600 46,090 $ 143,510 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 $79,600 cash. d. Received cash for the sale of equipment that had cost $70,600, yielding a $4,200 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.