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 Inventory Prepaid expenses 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 IKIBAN INCORPORATED 2021 2020 $ 99,700 $ 57,000 84,500 76,800 64,000 106,000 5,700 8,000 266,700 235,000 137,000 (33,500) $ 370,200 $ 38,000 7,300 4,700 128,000 (15,500) $ 347,500 $ 49,500 17,600 6,400 50,000 73,500 43,000 73,000 93,000 146,500 246,000 173,000 31,200 28,000 $ 370,200 $ 347,500 Income Statement For Year Ended June 30, 2021 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 $ 743,000 424,000 319,000 80,000 71,600 167,400 3,300 170,700 45,190 $ 125,510 d 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 $70,600 cash. d. Received cash for the sale of equipment that had cost $61,600, yielding a $3,300 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. 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. IKIBAN, INCORPORATED Cash flows from operating activities Net income 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 Depreciation expense Gain on sale of plant assets Changes in current operating assets and liabilities Increase in accounts receivable Decrease in inventory Decrease in prepaid expenses Decrease in wages payable Decrease in income taxes payable $ 125,510 71,600 (3,300) (20,500) 29,200 2,300 (10,300) (1,700) 192,810 Cash flows from investing activities Cash received from sale of equipment Cash paid for equipment Cash flows from financing activities Cash paid to retire notes Cash paid for dividends Increase in prepaid expenses >> 11,300 (70,600) $ 192,810 (30,000) (122,310) 73,000 (59,300) (79,310) Net increase (decrease) in cash $ 54,200 Cash balance at prior year-end Cash balance at current year-end $ 54,200 *Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted.