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 2021 2020 $ 93,700 99,500 $ 67,000 86,800 74,000 121,000 6,700 10,000 286,700 147,000 (38,500) $ 395,200 $ 48,000 8,300 272,000 138,000 (20,500) $ 389,500 $ 64,500 19,600 8,400 92,500 5,700 62,000 53,000 83,000 115,000 175,500 266,000 14,200 $ 395,200 183,000 31,000 $ 389,500 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 $ 793,000 434,000 359,000 90,000 81,600 187,400 4,300 191,700 46,190 Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income Additional Information $ 145,510 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 $80,600 cash. d. Received cash for the sale of equipment that had cost $71,600, yielding a $4,300 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.