The following financial statements and additional information are reported. At June 30 Assets Cash Accounts receivable, net Prepaid expenses Inventory IKIBAN INCORPORATED Comparative Balance Sheets 2021 2020 $ 87,500 $ 44,000 65,000 51,000 63,800 86,500 4,400 5,400 220,700 186,900 124,000 115,000 (27,000) (9,000) Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Wages payable Income taxes payable Total current liabilities Notes payable (long term) Total liabilities Equity Common stock, $5 par value Retained earnings Total liabilities and equity $ 317,700 $ 25,000 6,000 $ 292,900 $ 30,000 15,000 3,400 3,800 34,400 48,800 30,000 60,000 64,400 108,800 220,000 160,000 33,300 $ 317,700 24,100 $ 292,900 Sales IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income Additional Information $ 678,000 411,000 267,000 67,000 58,600 141,400 2,000 143,400 43,890 $ 99,510 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 $57,600 cash. d. Received cash for the sale of equipment that had cost $48,600, yielding a $2,000 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. Using the direct method, prepare the statement of cash flows for the year ended June 30, 2021. Note: Amounts to be deducted should be indicated with a minus sign. IKIBAN, Statement of Cash Flows (Direct Method) For Year Ended June 30, 2021 Cash flows from operating activities Net income Depreciation expense Gain on sale of plant assets Increase in accounts receivable Decrease in merchandise inventory $ 99,510 X 58,600 (2,000) $ 156,110 Cash flows from investing activities Cash paid for equipment Gain on sale of plant assets (57,600) 10,000 Net cash provided by financing activities (47,600) Cash flows from financing activities Cash paid to retire notes (30,000) Cash received from stock issuance 60,000 Cash paid for dividends (90,310) Net cash used in financing activities Net increase (decrease) in cash Cash balance at prior year-end 1 (60,310) 48,200 10.000