Required information [The following information applies to the questions displayed below.) The following financial statements and additional information are reported. 2020 IKIBAN INCORPORATED Comparative Balance Sheets At June 30 2021 Assets Cash $ 103,900 Accounts receivable, net 74,000 Inventory 69,800 Prepaid expenses 5,000 Total current assets 252,700 Equipment 130,000 Accumulated depreciation-Equipment (30,000) Total assets $ 352,700 Liabilities and Equity Accounts payable $ 31,000 Wages payable 6,600 Income taxes payable 4,000 Total current liabilities 41,600 Notes payable (long term) 36,000 Total liabilities 77,600 Equity Common stock, $5 par value 232,000 Retained earnings 43,100 Total liabilities and equity $ 352,700 $ 50,000 57,000 95,500 6,600 209, 100 121,000 (12,000) $ 318,100 $ 39,000 16,200 5,000 60,200 66,000 126,200 166,000 25,900 $ 318,100 IKIBAN INCORPORATED 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 Throma hafnra tovac $ 708,000 417,000 291,000 73,000 64,600 153,400 2,600 156 am IKIBAN INCORPORATED 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 $ 708,000 417,000 291,000 73,000 64,600 153,400 2,600 156,000 44,490 $ 111,510 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 $63,600 cash. d. Received cash for the sale of equipment that had cost $54,600, yielding a $2,600 gain. e. Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement 1. 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. (Amounts to be deducted should be indicated with a minus sign.) IKIBAN, INCORPORATED Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2021 Cash flows from operating activities Net Income Adjustments to reconcile net income to net cash provided by operating activities $ 111,510 Gain on sale of plant assets Depreciation expense (2,600) 64,600 Changes in current operating assets and liabilities Increase in accounts receivable Decrease in inventory Decrease in prepaid expenses Decrease in accounts payable Decrease in wages payable Decrease in income taxes payable (17,000) 25,700 1,600 (8,000) (9,600) (1,000) $ 165,210 Net cash provided by operating activities Cash flows from investing activities Cash paid for equipment Gain on sale of plant assets (63,600) (63,600) Net cash provided by investing activities Cash flows from financing activities Cash paid to retire notes Cash received from stock issuance Cash paid for dividends 0 101,610 $ Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end $ 101.610