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, 2019 and 2018 2019 2018 $ 93,100 101,000 87,800 6,800 288,700 148,000 (39,000) $397,700 $ 68,000 75,000 122,500 10,200 275,700 139,000 (21,000) $393,700 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 $ 49,000 8,400 5,800 63,200 54,000 117,200 $ 66,000 19,800 8,600 94,400 84,000 178,400 268,000 12,500 $397,700 184,000 31,300 $393,700 IKIBAN INC. Income Statement For Year Ended June 30, 2019 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $82,600 Other expenses 91,000 Total operating expenses $ 798,000 435,000 363,000 173,600 189,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 4,400 193,800 46,290 $147,510 Check my work Net income $147,510 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 $81,600 cash d. Received cash for the sale of equipment that had cost $72,600, yielding a $4,400 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 information IKIBAN, INC. Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2019 Cash flows from operating activities Net income $ 147,510 Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Cash paid for equipment Depreciation expense Changes in current operating assets and liabilities 147,510 Cash flows from investing activities Cash flows from financing activities $ 147,510 Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end $ 147,510