The following financial statements and additional information are reported. IKIBAN INCORPORATED Comparative Balance Sheets. At June 30 Assets Cash Accounts receivable, net Prepaid expenses Inventory Total current assets Equipment Accumulated 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 Sales 2021 2020 $ 92,500 $ 69,000 102,500 76,000 88,800 124,000 6,900 10,400 290,700 279,400 149,000 140,000 (21,500) (39,500) $ 397,900 $ 67,500 $ 400,200 $ 50,000 8,20 20,000 5,900 8,800 64,400 96,300 55,000 85,000 119,400 181,300 270,000 10,800 $ 400,200 IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense 185,000 31,600 $ 397,900 $ 803,000 436,000 367,000 92,000 83,600 191,400 4,500 195,900 46,390 Saved Help Save & Exit Su 400,200 ed: Asignacion-Capitulo 16 Total liabilities and equity IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net incone Additional Information $803,000 436,000 367,000 92,000 03,600 191,400 4,500 195,900 46,390 $149,510 a. A $30,000 notes 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 $82,600 cash. d. Received cash for the sale of equipment that had cost $73.600, yielding a $4,500 gain. e. Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement f. All purchases and sales of inventory are on credit Required: (1) Prepare a statement of cash flows using the indirect method for the year ended June 30, 2021. (Amounts to be deducted should be indicated with a minus sign.) Cash flows from operating activities Net income IKIBAN, INCORPORATED Statement of Cash Flows (Indirect Method) For Year Ended June 30+2021 Adjustments to reconcile net income to net cash provided by operating activities income statement items not affecting cash Depreciation expense Gain on sale of plant assets 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 Net cash provided by operating activities Cash flows from investing activities Cash paid for equipment Cash received from sale of equipment S 149,510 83,600 (4,500) (26,500) 35,200 3,500 (17,500) (11,500) (2,900) (82.600) 78,100 $ 208,910 Required information Changes in current operating assets and lobites Increase in accounts receivable (26,500) Decrease in inventory 35,200 Decrease in prepaid expenses 3,500 Decrease in accounts payable Decrease in wages payable Decrease in income taxes payable (17,500) (11,500) Net cash provided by operating activities (2,900) Cash flows from investing activities Cash paid for equipment Cash received from sale of equipment $ 208,910 (82,600) 78,100 (4.500) 85,000 (30,000) Cash flows from financing activities Cash received from stock issuance Cash paid to tre notes Cash paid for dividends Net cash used in financing activities Net increase (decrease) in cash Cash balance at pnor year-end Cash balance at cument year end (170.310) (115.310) 80,100 60,000 $ 150,100