The following financial statements and additional information are reported. 2020 IKIBAN INCORPORATED Comparative Balance Sheets At June 30 2021 Assets Cash $ 80,300 Accounts receivable, net 83,000 Inventory 75,800 Prepaid expenses 5,600 Total current assets 244,700 Equipment 136,000 Accumulated depreciation-Equipment (33,000) Total assets $ 347,700 Liabilities and Equity Accounts payable $ 37,000 Wages payable 7,200 Income taxes payable 4,600 Total current liabilities 48,800 Notes payable (long term) 32,400 Total liabilities 81,200 Equity Common stock, $5 par value 244,000 Retained earnings 22,500 Total liabilities and equity $ 347,700 $ 56,000 63,000 104,500 7,800 231,300 127,000 (15,000) $ 343,300 $ 48,000 17,400 6,200 71,600 72,000 143,600 172,000 27,700 $ 343,300 IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense $ 738,000 423,000 315,000 79,000 70,600 165,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 3,200 168,600 45,090 $ 123,510 Additional Information a. A $39,600 note payable is retired at its $39,600 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 $69,600 cash. d. Received cash for the sale of equipment that had cost $60,600, yielding a $3,200 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. IKIBAN, INCORPORATED Statement of Cash Flows (Direct Method) For Year Ended June 30, 2021 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