The following financial statements and additional information are reported. \begin{tabular}{lrr} Notes payable (long term) & 48,000 & 78,000 \\ \cline { 2 - 3 } Total liabilities & 104,000 & 161,000 \\ Equity & & \\ Common stock, $5 par value & 256,000 & 178,000 \\ Retained earnings & 22,700 & 29,500 \\ \cline { 2 - 3 } Total liabilities and & $ & $ \\ equity & 382,700 & 368,500 \\ \cline { 2 - 3 } \end{tabular} 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 768,000429,000339,00085,00076,600177,400 3,800181,20045,690$135,510 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 $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 Operating Expenses on the income statement. f. All purchases and sales of inventory are on credit. Exercise 12-12 (Algo) Part 1 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.) IKIBAN, INCORPORATED Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2021 \begin{tabular}{|l|l|l|} \hline Cash flows from operating activities \\ \hline Net income & Adjustments to reconcile net income to net cash provided by operating activities \\ \hline Income statement items not affecting cash & & 135,510 \\ \hline Depreciation expense & & \\ \hline Gain on sale of plant assets \\ \hline Changes in current operating assets and liabilities & & \\ \hline Decrease in inventory & & \\ \hline Decrease in prepaid expenses & & \\ \hline Decrease in accounts payable & & \\ \hline Decrease in wages payable \\ \hline Decrease in income taxes payable \\ \hline Increase in accounts receivable \\ \hline Cash flows from investing activities \\ \hline \end{tabular}