Required information The following information applies to the questions displayed below] The following financial statements and additional information are reported. IKIBAN INC. Comparative Balance Sheets June 30, 2017 and 2016 2017 2016 Assets Cash Accounts receivable, net 101,000 Inventory Prepaid expenses Total current assets Equipment Accum. depreciation- Equipment Total assets $ 93,100 68,000 75,000 87,800 122,500 6.800 10.200 288,700 275,700 148,000 139,000 (39,000) (21,000) $397,700 $393,700 Liabilities and Equity Accounts payable Wages payable Income taxes payable Total current liabilities 63,200 Notes payable (long term) 54,000 Total liabilities Equity Common stock, $5 par value 268,000 Retained earnings Total liabilities and equity $ 49,000 66,000 19,800 8,600 94,400 84,000 117,200 178,400 8,400 5,800 184,000 31,300 12,500 $397,700 $393,700 IKIBAN INC. Income Statement For Year Ended June 30, 2017 Sales Cost of goods sold Gross profit Operating expenses $798,000 435,000 363,000 Depreciation expense Other expenses $82,600 91,000 Total operating expenses 173,600 189,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 4,400 193,800 46,290 $147,510 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 $81,600 cash. d. Received cash for the sale of equipment that had cost $72,600, yielding a $4,400 gain. e. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement. f. All purchases and sales of inventory are on credit