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 2016 2017 Assets $ 99,100 86,000 77,800 5,800 268,700 138,000 $58,000 65,000 107,500 8,200 238,700 129,000 Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment (34,000) (16,000) Total assets $372,700 $351,700 Liabilities and Equity Accounts payable Wages payable Income taxes payabl $ 51,000 17,800 6,60 39,000 7,400 4, Total current liabilities 51,200 44,000 75,400 74,000 Notes payable (long term) Total liabilities 95,200 149,400 Equity Common stock, $5 par value Retained earnings 248,000 29,500 174,000 28,300 $351,700 Total liabilities and equity $372,700 IKIBAN INC Income Statement For Year Ended June 30, 2017 Sales $748,000 425,000 323,000 Cost of goods sold Gross profit Operating expenses Depreciation expense Other expenses $72,600 81,000 Total operating expenses 153,600 169,400 Other gains (losses) Gain on sale of equipment 3,400 Income before taxes 172,800 45,290 Income taxes expense $127,510 Net income $127,510 Net income 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 $71,600 cash. d. Received cash for the sale of equipment that had cost $62,600, yielding a $3,400 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: (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 minus sign.) IKIBAN, INC Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2017 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 Cash flows from investing activities Cash flows from financing activities Net increase (decrease) in cash Cash balance at prior year-end lcash halance at curront voar ond