The following financial statements and additional information are reported. IKIBAN INC. Comparative Balance Sheets June 30, 2019 and 2018 2019 2018 $ 98,500 87,500 78,800 5,900 270,700 139,000 (34,500) $375,200 $ 59,000 66,000 109,000 8,400 242,400 130,000 (16,500) $355,900 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 $ 40,000 7,500 4,900 52,400 45,000 97,400 $ 52,500 18,000 6,800 77,300 75,000 152,300 250,000 27,800 $375,200 175,000 28,600 $355,900 IKIBAN INC. Income Statement For Year Ended June 30, 2019 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $73,600 Other expenses 82,000 Total operating expenses $753,000 426,000 327,000 155,600 171,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 3,500 174,900 45,390 $129,510 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 $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 Other 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, 2019. (Amounts to be deducted should be indicated with a minus sign.) IKIBAN, INC. Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2019 Cash flows from operating activities Net income Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Gain on sale of plant assets Depreciation expense 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 received from sale of equipment 0 Net cash used in investing activities Cash flows from financing activities Cash paid for dividends Cash paid to retire notes 0 $ 0 Net cash used in financing activities Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end CA 0