The following financial statements and additional information are reported. At June 30 Assets Cash Accounts receivable, net Inventory IKIBAN INCORPORATED Comparative Balance Sheets 2021 Prepaid expenses 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 IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 Sales 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 2020 $ 94,900 96,500 84,800 $ 65,000 72,000 118,000 6,500 9,600 282,700 264,600 145,000 136,000 (37,500) (19,500) $390,200 $ 381,100 $ 46,000 $ 61,500 8,100 19,200 5,500 8,000 59,600 88,700 51,000 81,000 110,600 169,700 262,000 181,000 17,600 30,400 $ 390,200 $ 381,100 $ 783,000 432,000 351,000 88,000 79,600 183,400 4,100 187,500 45,990 $ 141,510 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 $78,600 cash. d. Received cash for the sale of equipment that had cost $69,600, yielding a $4,100 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.