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 $106,900 66,500 64,800 4,500 242,700 125,000 (27,500) $340,200 $ 45,000 52,000 88,000 5,600 190,600 116,000 (9,500) $297,100 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 $ 26,000 6,100 3,500 35,600 31,000 66,600 $ 31,500 15, 200 4,000 50,700 61,000 111,700 222,000 51,600 $340,200 161,000 24,400 $297, 100 $683,000 412,000 271,000 IKIBAN INC. Income Statement For Year Ended June 30, 2019 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $59,600 Other expenses 68,000 Total operating expenses Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 127,600 143,400 2,100 145,500 43,990 $101,510 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 $58,600 cash. d. Received cash for the sale of equipment that had cost $49,600, yielding a $2,100 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. Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2019 Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Changes in current operating assets and liabilities $ 0 Cash flows from investing activities $ 0 Cash flows from investing activities 0 Cash flows from financing activities $ 0 Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end S 0