The following financial statements and additional information are reported. 2014 IKIBAN INC. Comparative Balance Sheets June 30, 2015 and 2014 2015 Assets Cash $ 101,300 Accounts receivable, net 69,200 Inventory 65,900 Prepaid expenses 4,400 $ 57,600 51,500 96,300 5,400 Total current assets Equipment Accum. depreciation Equipment 240,800 125,400 (28,400) 210,800 116,000 (10,600) Total assets $ 337,800 $ 316,200 Liabilities and Equity Accounts payable Wages payable Income taxes payable $ 26,100 7,200 2,600 $ 32,100 16,600 4,200 Total current liabilities Notes payable (long term) 35,900 42,000 52,900 70,000 77,900 122,900 Total liabilities Equity Common stock, $5 par value Retained earnings 235,000 24,900 185,000 8,300 Total liabilities and equity $ 337,800 $ 316,200 IKIBAN INC. Income Statement For Year Ended June 30, 2015 Sales Cost of goods sold $ 674,000 406,000 268,000 Gross profit Operating expenses Depreciation expense Other expenses $ 58,500 66,200 Total operating expenses 124,700 143,300 Other gains (losses) Gain on sale of equipment 2,500 Income before taxes Income taxes expense 145,800 58,320 Net income $ 87,480 Additional Information a. A $28,000 note payable is retired at its $28,000 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 $58,100 cash. d. Received cash for the sale of equipment that had cost $48,700, yielding a $2,500 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. For Year Ended June 30, 2015 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 financing activities 0 $ 0 Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end $ 0