The following financial statements and additional information are reported. IKIBAN INCORPORATED Comparative Balance Sheets At June 30 2021 2020 Assets $ Cash $ 87,500 44,000 Accounts receivable, net 65,000 51,000 Inventory 63,800 86,500 Prepaid expenses 4,400 5,400 Total current assets 220,700 186,900 Equipment 124,000 115,000 Accumulated depreciation- (27,000) (9,000) Equipment $ $ Total assets 317,700 292,900 Liabilities and Equity Accounts payable $ $ 25,000 30,000 Wages payable 6,000 15,000 Income taxes payable 3,400 3,800 Total current liabilities 34,400 48,800 Notes payable (long term) 30,000 60,000 Total liabilities 64,400 108,800 Equity Common stock, $5 par value 220,000 160,000 Retained earnings 33,300 24,100 Total liabilities and $ $ equity 317,700 292,900 IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 Sales Cost of goods sold Gross profit depreciation) Operating expenses (excluding Depreciation expense $ 678,000 411,000 267,000 67,000 58,600 141,400 Other gains (losses) Gain on sale of equipment 2,000 Income before taxes 143,400 43,890 $ 99,510 Income taxes expense Net income Additional Information 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 $57,600 cash. d. Received cash for the sale of equipment that had cost $48,600, yielding a $2,000 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.) Answer is not complete. IKIBAN, INCORPORATED Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2021 Cash flows from operating activities Net income Adjustments to reconcile net income to net cash provided by operating activities $ 99,510 Income statement items not affecting cash Depreciation expense Gain on sale of plant assets Changes in current operating assets and liabilities Decrease in accounts payable Decrease in wages payable Decrease in income taxes payable Decrease in inventory Decrease in prepaid expenses 3 58,600 (2,000) (5,000) (9,000) (400) 22,700 1,000 $ 165,410 Cash flows from investing activities Cash received from sale of equipment Cash paid for equipment 3 2,000X (57,600) (55,600) Cash flows from financing activities Cash paid to retire notes Cash paid for dividends Cash received from stock issuance (30,000) (66,210 X 60,000 Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end (36,210) $ 73,600 37,390X $ 110,990