The following financial statements and additional information are reported. 2020 IKIBAN INCORPORATED Comparative Balance Sheets At June 30 2021 Assets Cash $ 97,300 Accounts receivable, net 90,500 Inventory 80,800 Prepaid expenses 6,100 Total current assets 274,700 Equipment 141,000 Accumulated depreciation-Equipment (35,500) Total assets $ 380, 200 Liabilities and Equity Accounts payable $ 42,000 Wages payable 7,700 Income taxes payable 5, 100 Total current liabilities 54,800 Notes payable (long term) 47,000 Total liabilities 101,800 Equity Common stock, $5 par value 254,000 Retained earnings 24,400 Total liabilities and equity $ 380,200 $ 61,000 68,000 112,000 8,800 249,800 132,000 (17,500) $ 364,300 $ 55,500 18,400 7,200 81,100 77,000 158, 100 177,000 29,200 $ 364,300 IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense $763,000 428,000 335,000 84,000 75,600 175,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 3,700 179,100 45,590 $ 133,510 Additional Information a. A $30,000 notes 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 $74,600 cash. d. Received cash for the sale of equipment that had cost $65,600, yielding a $3,700 gain. e. Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement. f. All purchases and sales of inventory are on credit. Required: (1) Prepare a statement of cash flows using the indirect method for the year ended June 30, 2021. (Amounts to be deducted should be indicated with a minus sign.) Answer is not complete. IKIBAN, INCORPORATED Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2021 Cash flows from operating activities Net income Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Depreciation expense Gain on sale of plant assets $ 133,510 75,600 (3,700) Changes in current operating assets and liabilities Increase in accounts receivable Decrease in inventory Decrease in prepaid expenses Decrease in accounts payable Decrease in wages payable Decrease in income taxes payable (22,500) 31,200 2,700 (13,500) (10,700) (2.100) $ 190,510 Net cash provided by operating activities Cash flows from investing activities Cash received from sale of equipment Cash paid for equipment 10,700 (74,600) (63,900) Net cash used in investing activities Cash flows from financing activities Cash received from stock issuance Cash paid to retire notes Cash paid for dividends 77,000 (30,000) (138,310) (91,310) 35,300 $ Net cash used in financing activities Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end 35,300