The following financial statements and additional information are reported. IKIBAN INC Comparative Balance Sheets June 30, 2017 and 2016 2017 2016 Assets Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets $ 93,100 68,000 75,000 122,500 10,200 275,700 139,000 101,000 87,800 6,800 288,700 148,000 (39,000 21,000) $397,700 $393,700 Liabilities and Equity Accounts payable Wages payable Income taxes payable Total current liabilities Notes Total liabilities Equity Common stock, $5 par value Retained earnings Total liabilities and equity $ 49,000 8,400 5,800 63,200 54,000 117,200 66,000 19,800 8,600 94,400 84,000 178,400 payable (long term) 184,000 31,300 $397,700 $393,700 268,000 12,500 IKIBAN INC Income Statement For Year Ended June 30, 2017 Sales Cost of goods sold Gross profit Operating expenses $798,000 435,000 363,000 Depreciation expense Other expenses $82,600 91,000 Total operating expenses 173,600 189,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 4,400 193,800 46,290 $147,510 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 $81,600 cash. d. Received cash for the sale of equipment that had cost $72,600, yielding a $4,400 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. on the nd sales of inventory are on creditt IKIBAN, INC. Statement of Cash Flows (Direct Method) For Year Ended June 30, 2017 Cash flows from operating activities Cash received from customers Cash paid for inventory Cash paid for operating expenses Cash paid for income taxes Cash paid for operating expenses $772,000 417,300 99,000 49,090 206,610 $1,544,000 Cash flows from investing activities Gain on sale of plant assets 2,400 12,400 Cash flows from financing activities 0 $ 1,556,400 Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end $ 1,556,400