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 Accum. depreciation-Equipment Total assets $106,900 45,000 52,000 88,000 5,600 190,600 125,000 116,000 66,500 4,500 242,700 (27,500) $340,200 $297,100 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 $ 26,000 31,500 6,100 15,200 3,500 4,000 50,700 31,00061,000 111,700 35, 600 66,600 222,000 161,000 24,400 $340,200 $297,100 51,600 IKIBAN INC. Income Statement For Year Ended June 30, 2017 Sales Cost of goods sold Gross profit Operating expenses $683,000 412,000 271,000 Depreciation expense $59,600 Other expenses Total operating expenses 127,600 143,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 2,100 145,500 43,990 $101,510 Total operating expenses 127,600 143,400 . Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 2,100 145,500 43,990 $101,510 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 $58,600 cash d. Received cash for the sale of equipment that had cost $49,600, yielding a $2,100 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. Required: