The following financial statements and additional information are reported. IKIBAN INC Comparative Balance Sheets June 30, 2015 and 2014 2015 2014 Accounts receivable, net Prepaid expenses Total current assets $109,600 72,600 51,900 96,300 6,100 69,300 66,600 4,400 249,900 122,400 (28,800) 226,900 111,000 (10,900) Accum. depreciation-Equipment Total assets $343,500 327,000 Liabilities and Equity Accounts payable Wages payable Income taxes payable $ 26,600 32,900 16,800 4,100 7,100 2,600 Total current liabilities Notes payable (long term) 36,300 53,800 75,000 Total liabilities 85,300 Common stock, $5 par value Retained earnings 233,000 25,200 190,000 8,200 Total liabilities and equity $343,500 327,000 IKIBAN INC. Income Statement For Year Ended June 30, 2015 Sales Cost of goods sold $ 673,000 403,000 Gross profit 270,000 Depreciation expense Other expenses 58,100 66,600 Total operating expenses 124,700 145,300 2,100 147,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense 58,960 Net income S 88,440 a. A $26,000 note payable is retired at its $26,000 carrying (book) value in exchange for cash. b. The only changes offecting retained earnings are net income and cash dividends paid c. New equipment is acquired for $60,900 cash. d. Received cash for the sale of equipment that had cost $49,500, yielding a $2,100 gain. e. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement. t All purchases and sales of inventory are on credit