The following financial statements and additional information are reported. IKIBAN INCORPORATED Comparative Balance Sheets 2021 2020 $ 79,100 $ 58,000 86,000 77,800 65,000 107,500 5,800 8,200 248,700 238,700 138,000 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 $ 352,700 $ 39,000 7,400 (34,000) 129,000 (16,000) $ 351,700 $ 51,000 17,800 4,800 6,600 51,200 75,400 32,800 74,000 84,000 149,400 248,000 174,000 20,700 28,300 $ 352,700 $ 351,700 IKIBAN INCORPORATED Income Statement 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 $ 748,000 425,000 323,000 81,000 72,600 169,400 3,400 172,800 45,290 $ 127,510 Additional Information a. A $41,200 note payable is retired at its $41,200 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 $71,600 cash. d. Received cash for the sale of equipment that had cost $62,600, yielding a $3,400 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.