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 Assets Cash $ 102,700 $ 52,000 Accounts receivable, net 77,000 59,000 Inventory 71,800 98,500 Prepaid expenses 5,200 7,000 Total current assets 256,700 216,500 Equipment 132,000 123,000 Accum. depreciationEquipment (31,000 ) (13,000 ) Total assets $ 357,700 $ 326,500 Liabilities and Equity Accounts payable $ 33,000 $ 42,000 Wages payable 6,800 16,600 Income taxes payable 4,200 5,400 Total current liabilities 44,000 64,000 Notes payable (long term) 38,000 68,000 Total liabilities 82,000 132,000 Equity Common stock, $5 par value 236,000 168,000 Retained earnings 39,700 26,500 Total liabilities and equity $ 357,700 $ 326,500 IKIBAN INC. Income Statement For Year Ended June 30, 2017 Sales $ 718,000 Cost of goods sold 419,000 Gross profit 299,000 Operating expenses Depreciation expense $ 66,600 Other expenses 75,000 Total operating expenses 141,600 157,400 Other gains (losses) Gain on sale of equipment 2,800 Income before taxes 160,200 Income taxes expense 44,690 Net income $ 115,510 Additional Information A $30,000 note payable is retired at its $30,000 carrying (book) value in exchange for cash. The only changes affecting retained earnings are net income and cash dividends paid. New equipment is acquired for $65,600 cash. Received cash for the sale of equipment that had cost $56,600, yielding a $2,800 gain. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement. All purchases and sales of inventory are on credit.