The following financial statements and additional information are reported. IKIBAN INC. Comparative Balance Sheets June 30, 2017 and 2016 2017 2016 Assets Cash $102,100 $ 53,000 Accounts receivable, net 78,500 Inventory 72, 800 60,000 100,000 Prepaid expenses 5,300 7, 200 Total current assets 259, 700 220, 200 Equipment 133,000 124,000 Accum. depreciation Equipment (31, 500) (13,500) Total assets $360, 200 $330, 700 Liabilities and Equity Accounts payable $ 34,000 $ 43,500 Wages payable 6, 900 16,800 Income taxes payable 4,300 5,600 Total current liabilities 45,200 65,900 Notes payable (long term) 39,000 69,000 Total liabilities 84 , 200 134,900 Equity Common stock, $5 par value 238,000 169,000 Retained earnings 38,000 26,800 Total liabilities and equity $360, 200 $330, 700 IKIBAN INC. Income Statement For Year Ended June 30, 2017 Sales $723,000 Cost of goods sold 420,000 Gross profit 303,000 Operating expenses Depreciation expense $67,600 Other expenses 76,000 Total operating expenses 143, 600 159, 400 Other gains (losses ) Gain on sale of equipment 2,900 Income before taxes 162,300 Income taxes expense 44,790 Net income $117, 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 $66,600 cash. d. Received cash for the sale of equipment that had cost $57,600, yielding a $2,900 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.IKIBAN, INC. Statement of Cash Flows (Direct Method) For Year Ended June 30, 2017 Cash flows from operating activities 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 5