The following financial statements and additional information are reported. IKIBAN INC. Comparative Balance Sheets June 30, 2017 and 2016 2017 2016 Assets Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment $ 87, 500 44,000 65, 000 63, 800 4, 400 220,700 51,000 86,500 5, 400 186,900 124, 000 115,000 (27,000) (9,000) $317, 700 $292,900 hcoum, dep reciation-ausipaient 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 s 25,000 30, 000 15,000 3,800 6, 000 3,400 34.400 48. 800 30,000 60, 64,400 108,800 220, 000160, 000 24,100 $317,700 $292,900 33, 300 Total liabilities and equity IKIBAN INC. Income Statement For Year Ended June 30, 201 $678,000 411,000 267,000 Sales Cost of goods sold Gross profit Operating expenses $58, 600 67,000 Depreciation expense Other expenses Total operating expenses 125, 600 141, 400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 2,000 143, 400 43,890 $99,510 Additional Information 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 Other Expenses on the income statement. f. All purchases and sales of inventory are on credit. Exercise 12-11 Part 1 Required: (1) Prepare a statement of cash flows for the year ended June 30, 2017, using the indirect method. (Am be indicated with a minus sign.) 3 Answer is not complete. IKIBAN, INC. Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2017 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 S 99,510 (2,000) @| 58,600 156.110 Depreciation expense Increase in income taxes payable Changes in current operating assets and liabilities Increase in accounts receivable Decrease in prepaid expenses Decrease in inventory Increase in accounts payable Increase in wages payable Increase in income taxes payable (14,000) 1,000 22,700 (5,000) (9,000) (400) Net cash used in operating activities $ 307,520 Cash flows from investing activities 10,000 (57 600) Cash received from sale of equipment Cash paid for equipment Net cash used in operating activities (47,600) Cash flows from financing activities Cash paid for dividends Cash paid to retire notes Cash received from stock issuance (90,310) (30,000) 60,000 Net cash used in financing activities Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end (60,310) 199,610 44,000 S 243,610