The following financial statements and additional Information are reported. IKIBAN INCORPORATED Comparative Balance Sheets 2021 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 IKIBAN INCORPORATED Income Statement 2020 $ 78,500 87,500 $ 59,000 78,800 5,900 66,000 109,000 8,400 250,700 242,400 139,000 (34,500) $ 355,200 130,000 (16,500) $ 355,900 $ 40,000 7,500 $ 52,500 18,000 4,900 6,800 52,400 77,300 33,000 75,000 85,400 152,300 250,000 19,800 175,000 28,600 $ 355,200 $ 355,900 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 income Additional Information $ 753,000 426,000 327,000 82,000 73,600 171,400 3,500 174,900 45,390 $ 129,510 a. A $42,000 note payable is retired at its $42,000 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 $72,600 cash. d. Received cash for the sale of equipment that had cost $63,600, yielding a $3,500 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. Using the direct method, prepare the statement of cash flows for the year ended June 30, 2021. (Amounts to be deducted should be Indicated with a minus sign.) Additional Information a. A $42,000 note payable is retired at its $42,000 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 $72,600 cash. d. Received cash for the sale of equipment that had cost $63,600, yielding a $3,500 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. Using the direct method, prepare the statement of cash flows for the year ended June 30, 2021. (Amounts to be deducted should be Indicated with a minus sign.) IKIBAN, INCORPORATED Statement of Cash Flows (Direct Method) For Year Ended June 30, 2021 Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Net increase (decrease) in cash $ 0 0 0 $ 0 Cash balance at prior year-end Cash balance at current year-end $ 0