The following financial statements and additional Information are reported. IKIBAN INCORPORATED Comparative Balance Sheets At June 30 Assets Cash Accounts receivable, net Prepaid expenses 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 Retained earnings Total liabilities and equity Sales Cost of goods sold IKIBAN INCORPORATED Income Statement 2021 2020 $ 101,500 80,000 $ 54,000 73,800 61,000 101,500 5,400 7,400 260,700 223,900 134,000 (32,000) $ 362,700 125,000 (14,000) $ 334,900 $ 35,000 7,000 $ 45,000 17,000 4,400 5,800 46,400 67,800 40,000 70,000 86,400 137,800 240,000 170,000 36,300 $362,700 27,100 $334,900 For Year Ended June 30, 2021 $ 728,000 421,000 307,000 Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income Additional Information 72,000 68,600 161,400 3,000 164,400 44,890 $ 119,510 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 $67,600 cash. d. Received cash for the sale of equipment that had cost $58,600, yielding a $3,000 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