The following financial statements and additional information are reported. 2018 IKIBAN INC. Comparative Balance Sheets June 30, 2019 and 2018 2010 Assets Cash $ 82,700 Accounts receivable, net 77,000 Inventory 71, 808 Prepaid expenses 5,200 Total current assets 236,700 Equipment 132,000 Accum. depreciation Equipment (31,000) Total assets $337, 700 Liabilities and Equity Accounts payable $ 33,000 Wages payable 6, 800 Income taxes payable 4,200 Total current liabilities 44,000 Notes payable (long term) 31,600 Total liabilities 75,688 Equity Common stock, $5 par value 236,000 Retained earnings 26, 100 Total liabilities and equity $337,780 $ 52,000 59,000 98,500 7,000 216,500 123,000 (13,000) $326,580 $ 42,000 16, 600 5, 400 64,000 68,000 132,000 168,000 2 6,500 $326,500 IKIBAN INC. Income Statement For Year Ended June 30, 2019 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $66,600 other expenses 75,000 Total operating expenses $718,888 419,000 299,000 141, 600 157,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 2,800 160,200 44,690 $115, 510 Additional Information a. A $36,400 note payable is retired at its $36,400 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 $65,600 cash. d. Received cash for the sale of equipment that had cost $56,600, yielding a $2,800 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. Using the direct method, prepare the statement of cash flows for the year ended June 30, 2019. (Amounts to be deducted should be indicated with a minus sign.) IKIBAN, INC. Statement of Cash Flows (Direct Method) For Year Ended June 30, 2019 Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end Additional Information a. A $36,400 note payable is retired at its $36,400 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 $65,600 cash. d. Received cash for the sale of equipment that had cost $56,600, yielding a $2,800 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