Required information [The following information applies to the questions displayed below.) The following financial statements and additional information are reported. IKIBAN INC. Comparative Balance Sheets June 30, 2017 and 2016 2017 2016 $ 92,500 102,500 88,800 6,900 290, 700 149,000 (39,500) $400,200 $ 69,000 76,000 124,000 10,400 279,400 140,000 (21,500) $397,900 Assets Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accum. 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 $ 50,000 8,500 5,900 64,400 55,000 119,400 $ 67,500 20,000 8,800 96,300 85,000 181,300 270,000 10,800 $400,200 185,000 31,600 $397,900 IKIBAN INC. Income Statement For Year Ended June 30, 2017 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $83,600 Other expenses 92,000 Total operating expenses $803,000 436,000 367,000 175,600 191,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 4,500 195,900 46,390 $149,510 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 $82,600 cash. d. Received cash for the sale of equipment that had cost $73,600, yielding a $4,500 gain. e. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement. f. All purchases and sales of inventory are on credit. Required: (1) Prepare a statement of cash flows for the year ended June 30, 2017, using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) IKIBAN, INC. Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2017 Cash flows from operating activities Net income $ 149,510 Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Depreciation expense 83,600 | Gain on sale of plant assets (4,500) 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 $ 228,610 Cash flows from investing activities $ 228,610 Cash flows from investing activities Cash flows from financing activities $ 228,610 Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end $ 228,610