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. 2020 IKIBAN INCORPORATED Comparative Balance Sheets At June 30 2021 Assets Cash $ 100,300 Accounts receivable, net 83,000 Inventory 75,800 Prepaid expenses 5,600 Total current assets 264,700 Equipment 136,000 Accumulated depreciation-Equipment (33,000) Total assets $ 367,700 Liabilities and Equity Accounts payable $ 37,000 Wages payable 7,200 Income taxes payable 4,600 Total current liabilities 48,800 Notes payable (long term) 42,000 Total liabilities 90,800 Equity Common stock, $5 par value 244,000 Retained earnings 32,900 Total liabilities and equity $ 367,700 $ 56,000 63,000 104,500 7,800 231,300 127,000 (15,000) $ 343,300 $ 48,000 17,400 6,200 71,600 72,000 143,600 172,000 27,700 $ 343,300 IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense $ 738,000 423,000 315,000 79,000 70,600 165,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 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. 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.) IKIBAN, INCORPORATED Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2021 Cash flows from operating activities Net income Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash $ 123,510 Changes in current operating assets and liabilities Cash paid to retire notes 30,000 $ 153,510 Cash flows from investing activities Cash paid for equipment Gain on sale of plant assets 69,600 3,200 72,800 Cash flows from financing activities 0 $ 226,310 Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end $ 226,310