The following financial statements and additional information are reported. IKIBAN INCORPORATED Comparative Balance Sheets At June 30 Assets Cash Accounts receivable, net Prepaid expenses 2021 2020 $ 87,500 $ 44,000 65,000 51,000 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 63,800 86,500 4,400 5,400 220,700 186,900 124,000 115,000 (27,000) (9,000) $ 317,700 292,900 $ 25,000 6,000 $ 30,000 15,000 3,400 34,400 3,800 48,800 30,000 60,000 64,400 108,800 220,000 160,000 Retained earnings 33,300 24,100 Total liabilities and equity $ 317,700 $ 292,900 IKIBAN INCORPORATED Income Statement Sales 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 Net income $ 678,000 411,000 267,000 67,000 58,600 141,400 2,000 143,400 43,890 $ 99,510 < Prev 7 of 8 tes 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 Increase in accounts receivable Changes in current operating assets and liabilities Increase in inventory Increase in prepaid expenses Decrease in accounts payable Decrease in wages payable Decrease in income taxes payable Cash paid for operating expenses $ 99,510 58,600 (2,000) (14,000) 3,700 1,000 (5,000) 9,000 400 170,310 $ 321,520 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 $ 321,520 $ 321,520 The following financial statements and additional information are reported. At June 30 Assets Cash Accounts receivable, net Prepaid expenses Inventory IKIBAN INCORPORATED Comparative Balance Sheets 2021 2020 $ 87,500 65,000 $ 44,000 51,000 63,800 86,500 4,400 5,400 220,700 186,900 124,000 115,000 (9,000) 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 $ 317,700 $ 25,000 6,000 (27,000) $ 292,900 $ 30,000 15,000 3,400 3,800 34,400 48,800 30,000 60,000 64,400 108,800 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 $ 678,000 411,000 267,000 67,000 Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 58,600 141,400 2,000 143,400 43,890 $ 99,510 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.) Cash flows from operating activities 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: es Required information: 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 $ 0 $ 0