The following financial statements and additional information are reported. 2018 IKIBAN INC. Comparative Balance Sheets June 30, 2019 and 2018 2019 Assets Cash $ 76,700 Accounts receivable, net 92,000 Inventory 81,800 Prepaid expenses 6,200 Total current assets 256,700 Equipment 142,000 Accum. depreciation-Equipment Total assets $362,700 Liabilities and Equity Accounts payable $ 43,000 Wages payable 7,800 Income taxes payable 5,200 Total current liabilities 56,000 Notes payable (long term) 33,600 Total liabilities 89,600 Equity Common stock, $5 par value 256,000 Retained earnings 17,100 Total liabilities and equity $362,700 $ 62,000 69,000 113,500 9,000 253,500 133,000 (18,000) $368,500 $ 57,000 18,600 7,400 83,000 78,000 161,000 178,000 29,500 $368,500 IKIBAN INC. Income Statement For Year Ended June 30, 2019 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $ 76,600 Other expenses 85,000 Total operating expenses $768,000 429,000 339,000 161,600 177,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 3,800 181,200 45,690 $135,510 Additional Information a. A $44,400 note payable is retired at its $44,400 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 $75,600 cash. d. Received cash for the sale of equipment that had cost $66,600, yielding a $3,800 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 Net income $ 135,510 Increase in accounts receivable Decrease in merchandise inventory Decrease in accounts payable 135,510 Cash flows from investing activities Cash flows from financing activities $ 135,510 Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end $ 135,510