Required information [The following information applies to the questions displayed below.) The following financial statements and additional information are reported. 2018 IKIBAN INC. Comparative Balance Sheets June 30, 2019 and 2018 2019 Assets Cash $100,900 Accounts receivable, net 81,500 Inventory 74,800 Prepaid expenses 5,500 Total current assets 262,700 Equipment 135,000 Accum. depreciation-Equipment (32,500) Total assets $365,200 Liabilities and Equity Accounts payable $ 36,000 Wages payable 7,100 Income taxes payable 4,500 Total current liabilities 47,600 Notes payable (long term) 41,000 Total liabilities 88,600 Equity Common stock, $5 par value 242,000 Retained earnings 34,600 Total liabilities and equity $365,200 $ 55,000 62,000 103,000 7,600 227,600 126,000 (14,500) $339, 100 $ 46,500 17,200 6,000 69, 700 71,000 140, 700 171,000 27,400 $339, 100 $ 733,000 422,000 311,000 IRIBAN INC. Income Statement For Year Ended June 30, 2019 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense 569,600 other expenses 78,000 Total operating expenses Other gains (lonnes) Gain on sale of equipment Income before taxes Income taxes expense Net Income 147,600 163,400 3,100 166,500 44.990 $121,510 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 $68,600 cash. d. Received cash for the sale of equipment that had cost $59,600, yielding a $3,100 gain. e. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement 4. All purchases and sales of inventory are on credit. Cash flows from operating activities Net income $ 121,510 Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Depreciation expense 69,600 Cash received from sale of equipment (3,100) Cash paid for equipment 0 Changes in current operating assets and liabilities Increase in accounts receivable (19,500) Decrease in inventory 28,200 Decrease in prepaid expenses 2,100 Decrease in accounts payable (10,500) Decrease in wages payable (10,500) Decrease in income taxes payable (1,500) Cash paid for dividends 400 Net cash provided by financing activities 176,710 Cash flows from investing activities Cash received from sale of equipment (30,000) Cash paid for equipment 71,000 Cash paid for dividends (114,310) Net cash provided by investing activities (73,310) (10,500) (1,500) 400 $ 176,710 (30,000) 71,000 (114,310) Decrease in wages payable Decrease in income taxes payable Cash paid for dividends Net cash provided by financing activities Cash flows from investing activities Cash received from sale of equipment Cash paid for equipment Cash paid for dividends Net cash provided by investing activities Cash flows from financing activities Cash paid for equipment Cash paid for income taxes Cash paid for income taxes Cash paid for income taxes Net cash used in financing activities Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end (73,310) 45,000 $ 55,000 780 6,868 107,648 211,048 55,000 266,048 $
