The following financial statements and additional Information are reported. IKIBAN INC. Comparative Balance Sheets June 30, 2018 and 2017 2018 2017 $ 85,789 69,5ee 66,800 4,790 226,780 127,800 (28,500) $325,200 $ 47,00 54,800 91,eee 6,eee 198,290 118,899 (10,580) $395,500 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 $ 28,888 6,300 3.780 38,000 33, 80e 71,880 $ 34,500 15,600 4.400 54,500 63, Bee 117,500 226,800 28 289 $325,200 163,000 25.000 $395,500 IKIBAN INC. Income Statement For Year Ended June 30, 2018 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $61,600 Other expenses 70,000 Total operating expenses $693,880 414,800 279, 280 131,600 147,490 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 2,300 149,790 44,190 $195,512 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 pald. c. New equipment is acquired for $60,600 cash. d. Received cash for the sale of equipment that had cost $51,600, ylelding a $2,300 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, 2018 Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Changes in current operating assets and liabilities Cash flows from investing activities Cash flows from financing activities Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end