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 INC. Comparative Balance Sheets At June 30 Assets Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Accounts payable Wages payable Income taxes payable Total current liabilities Notes payable (long term) 2828 2019 $ 93,700 99,500 $ 67,000 74,000 86,800 121,000 6,700 10,000 286,700 272,000 147,000 138,000 (38,500) (20,580) $395,200 $389,500 5,788 $ 48,000 8,300 $ 64,500 19,600 8,480 62,000 92,500 53,000 83,000 Total liabilities 115,000 175,500 Equity Common stock, $5 par value 266,000 183,000 Retained earnings 14,200 31,000 Total liabilities and equity $395,200 $389,500 IKIBAN INC. Income Statement For Year Ended June 30, 2020 Sales 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 $ 793,000 434,000 359,000 98,000 81,600 187,400 4,300 191,700 46,198 $ 145,518 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 $80,600 cash. d. Received cash for the sale of equipment that had cost $71,600, yielding a $4,300 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.