The following financial statements and additional information are reported. IKIBAN INC. Comparative Balance Sheets June 30, 2017 and 2016 2017 2016 Assets Cash $ 100,300 $ 56,000 Accounts receivable, net 83,000 63,000 Inventory 75,800 104,500 Prepaid expenses 5,600 7,800 Total current assets 264,700 231,300 Equipment 136,000 127,000 Accum. depreciationEquipment (33,000 ) (15,000 ) Total assets $ 367,700 $ 343,300 Liabilities and Equity Accounts payable $ 37,000 $ 48,000 Wages payable 7,200 17,400 Income taxes payable 4,600 6,200 Total current liabilities 48,800 71,600 Notes payable (long term) 42,000 72,000 Total liabilities 90,800 143,600 Equity Common stock, $5 par value 244,000 172,000 Retained earnings 32,900 27,700 Total liabilities and equity $ 367,700 $ 343,300 IKIBAN INC. Income Statement For Year Ended June 30, 2017 Sales $ 738,000 Cost of goods sold 423,000 Gross profit 315,000 Operating expenses Depreciation expense $ 70,600 Other expenses 79,000 Total operating expenses 149,600 165,400 Other gains (losses) Gain on sale of equipment 3,200 Income before taxes 168,600 Income taxes expense 45,090 Net income $ 123,510 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 $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 Other Expenses on the income statement. f.All purchases and sales of inventory are on credit.