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 2021 2020 Assets Cash Accounts receivable, net $ 97,900 89,000 $ 60,000 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 Common stock, $5 par value Retained earnings Total liabilities and equity 79,800 6,000 67,000 110,500 8,600 272,700 246,100 140,000 (35,000) $ 377,700 $ 41,000 7,600 5,000 131,000 (17,000) $ 360,100 $ 54,000 18,200 7,000 53,600 79,200 46,000 76,000 99,600 155,200 252,000 176,000 26,100 $ 377,700 28,900 $ 360,100 Sales IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 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 Additional Information $ 758,000 427,000 331,000 83,000 74,600 173,400 3,600 177,000 45,490 $ 131,510 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 $73,600 cash. d. Received cash for the sale of equipment that had cost $64,600, yielding a $3,600 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. Note: Amounts to be deducted should be indicated with a minus sign.