The following financial statements and additional information are reported. IKIBAN INCORPORATED Comparative Balance Sheets At June 30 Assets Cash Accounts receivable, net Inventory Prepaid expenses 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 Cost of goods sold i IKIBAN INCORPORATED Income Statement 2021 2020 $ 93,700 99,500 $ 67,000 74,000 86,800 121,000 6,700 10,000 286,700 272,000 147,000 138,000 (38,500) $ 395,200 $ 48,000 8,300 (20,500) $389,500 $ 64,500 19,600 8,400 5,700 62,000 92,500 53,000 83,000 115,000 175,500 266,000 183,000 14,200 31,000 $ 395,200 $389,500 For Year Ended June 30, 2021 Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes. Income taxes expense Net income Additional Information $ 793,000 434,000 359,000 90,000 81,600 187,400 4,300 191,7001 46,190 $145,510 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 $80,600 cash. d. Received cash for the sale of equipment that had cost $71,600, yielding a $4,300 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. 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 Changes in current operating assets and liabilities $ O 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 0 0 0 S