The following financial statements and additional information are reported. 2018 IKIBAN INC. Comparative Balance Sheets June 30, 2019 and 2018 2019 Assets Cash $ 77,900 Accounts receivable, net 89,000 Inventory 79,800 Prepaid expenses 6,000 Total current assets 252,700 Equipment 140,000 Accum. depreciation-Equipment (35,000) Total assets $357,700 Liabilities and Equity Accounts payable $ 41,000 Wages payable 7,600 Income taxes payable 5,000 Total current liabilities 53,600 Notes payable (long term) 33,200 Total liabilities 86,800 Equity Common stock, $5 par value 252,000 Retained earnings 18,900 Total liabilities and equity $357,700 $ 60,000 67,000 110,500 8,600 246,100 131,000 (17,000) $360,100 $ 54,000 18,200 7,000 79,200 76,000 155, 200 176,000 28,900 $360,100 IKIBAN INC. Income Statement For Year Ended June 30, 2019 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $63,600 Other expenses 72,000 Total operating expenses $703,000 416,000 287,000 135,600 151,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 2,500 153,900 44,390 $109,510 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 $62,600 cash. d. Received cash for the sale of equipment that had cost $53,600, 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. IKIBAN, INC. Statement of Cash Flows (Direct Method) For Year Ended June 30, 2019 Cash flows from operating activities Cash received from customers Cash paid for inventory Cash paid for operating expenses Cash paid for income taxes Net cash provided by operating activities Cash flows from investing activities Cash paid for equipment Cash received from sale of equipment Net cash used in investing activities Cash flows from financing activities Cash paid for dividends Cash paid to retire notes Cash received from stock issuance Net cash used in financing activities Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end $ 0