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 2821 2020 $ 185,700 69,500 $ 47,000 66,800 54,000 91,000 4,700 6,000 246,700 198,000 127,000 (28,500) $ 345,200 $ 28,000 6,300 118,000 (10,500) $ 305,500 $ 34,500 15,600 4,400 3,700 38,000 54,500 33,000 63,000 71,000 117,500 226,000 48,200 163,000 25,000 $ 345,200 $ 305,500 Sales Cost of goods sold Gross profit IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 $ 693,000 414,000 279,000 70,000 61,600 147,400 2,300 149,700 44,198 Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income Additional Information $ 105,510 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 $60,600 cash. d. Received cash for the sale of equipment that had cost $51,600, yielding a $2,300 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.