The following financial statements and additional information are reported. IKIBAN INC.

Additional Information

A $30,000 note payable is retired at its $30,000 carrying (book) value in exchange for cash.

The only changes affecting retained earnings are net income and cash dividends paid.

New equipment is acquired for $57,600 cash.

Received cash for the sale of equipment that had cost $48,600, yielding a $2,000 gain.

Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.

All purchases and sales of inventory are on credit.

IKIBAN INC Comparative Balance Sheets June 30, 2017 and 2016 2017 2016 Assets Cash Accounts receivable, net Inventory Prepaid expenses rotal current assets Equipment Accum. depreciation-Equipment Total assets $87,500 65,000 63,800 4,400 220,700 124,000 (27,000) 44,000 51,000 86,500 5.400 186,900 115,000 (9,000) $317,700 292,900 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 $ 25,000 30,000 15,000 3,800 48,800 30,000 60,000 108,800 6,000 3.400 34,400 64,400 220,000 160,000 24,100 $317,700 292,900 33,300 Total liabilities and equity IKIBAN INC Income Statement For Year Ended June 30, 2017 Sales Cost of goods sold Gross profit Operating expenses $678,000 411,000 267,000 Depreciation expense $58,600 67,000 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