The following financial statements and additional information are reported. IKIBAN INC. Comparative Balance Sheets June 30, 2018 and 2017 2018 2017 $ 83,300 75,500 79,800 5,180 234,700 131,080 (30,500) $335,280 $ 51,000 58,000 97,080 6,800 212,800 122,000 (12,500) $322,300 Assets Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accum. 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 $ 32,000 6,709 4,100 42,800 37,000 79,800 $ 40, 500 16,400 5,200 62,100 67,800 129,109 234,000 21.400 $335, 200 167,000 26,200 $322,300 $713,000 418,000 295,000 IKIBAN INC. Income Statement For Year Ended June 30, 2018 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $65,600 Other expenses 74,000 Total operating expenses Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 139,609 155,400 2,700 158,100 44,590 $113,510 Pro U 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 $64.600 cash d. Received cash for the sale of equipment that had cost $55,600, yielding a $2,700 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 of 2 Required: (1) Prepare a statement of cash flows for the year ended June 30, 2018, using the indirect method (Amounts to be deducted should be indicated with a minus sign.) Book Cint IKIBAN, INC. Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2018 Cash flows from operating activities Net income S 113510 Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Depreciation expense 65,600 Gain on sale of plant assets (2.700) erences Changes in current operating assets and liabilities Increase in accounts receivable Decrease in inventory Decrease in prepaid expenses Decrease in accounts payable Decrease in wages payable Decrease in income taxes payable (17.500) 26,200 1.700 (8,500) (9,700) (1.100) $ 167,510 Cashflows from investing activities Required information TU U LJU, U 1 of 2 Cash flows from operating activities Net income 113,510 Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Depreciation expense 65,600 Gain on sale of plant assets (2.700) ts eBook Changes in current operating assets and liabilities Increase in accounts receivable Decrease in inventory Decrease in prepaid expenses Decrease in accounts payable Decrease in wages payable Decrease in income taxes payable Hint (17.500) 26,200 1.700 (8,500) (9.700) (1,100) Print eferences $ 167,510 Cash flows from investing activities 0 Cash flows from financing activities Cash paid for dividends Cash paid to retire notes Cash received from stock issuance 0 $ 167,510 Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end $ 167,510 W