! Required information [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 Common stock, $5 par value Retained earnings Total liabilities and equity Sales Cost of goods sold IKIBAN INCORPORATED Income Statement 2021 2020 $ 97,300 90,500 $ 61,000 80,800 68,000 112,000 6,100 8,800 274,700 249,800 141,000 (35,500) $ 380,200 $ 42,000 7,700 132,000 (17,500) $ 364,300 $ 55,500 18,400 7,200 5,100 54,800 81,100 47,000 77,000 101,800 158,100 254,000 24,400 $ 380,200 $ 364,300 For Year Ended June 30, 2021 177,000 29,200 $ 763,000 428,000 335,000 84,000 Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 75,600 175,400 3,700 179,100 45,590 $ 133,510 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 $74,600 cash. d. Received cash for the sale of equipment that had cost $65,600, yielding a $3,700 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. 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