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 Sales IKIBAN INCORPORATED Income Statement 2020 2019 $ 87,500 65,000 $ 44,000 51,000 63,800 86,500 4,400 5,400 220,700 186,900 115,000 124,000 (27,000) $ 317,700 $ 25,000 (9,000) $ 292,900 6,000 $ 30,000 15,000 3,800 3,400 34,400 48,800 30,000 60,000 64,400 108,800 220,000 160,000 33,300 $ 317,700 $ 292,900 For Year Ended June 30, 2020 Cost of goods sold 24,100 $ 678,000 411,000 267,000 Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net Income 67,000 58,600 141,400 143,400 43,890 $ 99,510 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 $57,600 cash. d. Received cash for the sale of equipment that had cost $48,600, yielding a $2,000 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, 2020. Note: Amounts to be deducted should be indicated with a minus sign. Cash flows from operating activities Answer is not complete. IKIBAN, INCORPORATED Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2020 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 Increase in accounts receivable Changes in current operating assets and liabilities Decrease in inventory Decrease in prepaid expenses Decrease in accounts payable Decrease in wages payable Decrease in income taxes payable S 99,510 58,600 (2,000) (14,000) 22,700 1,000- (5.000) - (9,000) - (400) - Net cash provided by operating activities S 151,410 Cash flows from investing activities Cash received from sale of equipment 10,000 Cash paid for equipment (57,600) (47,600) Cash flows from financing activities Cash paid to retire notes (30,000) Cash received from stock issuance 60,000 Cash paid for dividends (80,310) Net cash used in financing activities Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end (60,310) $ 43,500 44,000 $ 87,500