The following financial statements and additional information are reported. IKIBAN INC. Comparative Balance Sheets June 30, 2019 and 2018 2019 2018 $100,900 81,500 74,800 5,500 262,700 135,000 (32,500) $365,200 $ 55,000 62,000 103,000 7,600 227,600 126,000 (14,500) $339,100 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 $ 46,500 17,200 $ 36,000 7,100 4,500 47,600 41,000 88,600 69,700 171,000 140,700 242,000 34,600 $365,200 171,000 27,400 $339,100 IKIBAN INC. Income Statement For Year Ended June 30, 2019 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $69,600 Other expenses 78,000 Total operating expenses $ 733,000 422,000 311,000 147,600 163,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 3,100 166,500 44,990 $121,510 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 $68,600 cash d. Received cash for the sale of equipment that had cost $59,600 yielding a $3,100 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 IKIBAN, INC. Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2019 Cash flows from operating activities Net income $ 121,510 Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Gain on sale of plant assets 3.100 Decrease in income taxes payable Changes in current operating assets and liabilities $ 124.610 $ 124,610 Cash flows from investing activities 0 Cash flows from financing activities 0 124.610 CA Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end GA 124.610