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 $ 94,300 $66,000 73,000 119,500 9,800 268,300 137,000 (38,000) (20,009 $392,700$385,300 98,000 85,800 6,600 284,700 146,000 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 47,000 63,000 19,400 8, 200 90,600 82,000 172,600 8,200 5,600 60,800 52,000 112,800 182,000 30,700 $392,700$385,300 264,000 15,900 Total liabilities and equity IKIBAN INC. Income Statement For Year Ended June 30, 2017 Sales Cost of goods sold Gross profit Operating expenses $788,000 433,000 355,00e $80,600 89,000 Depreciation expense Other expenses Total operating expenses 169,608 185,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 4,200 189,600 46,090 $143,510 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 $79,600 cash. d. Received cash for the sale of equipment that had cost $70,600, yielding a $4,200 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. Exercise 12-11 Part 1 Requlrec: (1) Prepare a statement of cash flows for the year ended June 30, 2017, using the indirect method. (Amounts to be deducted should be Indicated wlth a mlnus sign.) IKIBAN, INC Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2017 Cash flows from operating activities Net income Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Depreciation expense Gain on sale of plant assets S 143,510 80,600 (4,200 Changes in current operating assets and liabilities Increase in accounts receivable Decrease in inventory Decrease in prepaid expenses Decrease in accounts payable Decrease in wages payable Decrease in income taxes payable (25,000 33.700 3,200 (16,000 (11,200 2,800) Net cash provided by operating activities Cash flows from investing activities 202,010 Cash received from sale of equipment Cash paid for equipment Net cash used in investing activities Cash flows from financing activities Cash received from stock issuance Cash paid to retire notes Cash paid for dividends Net cash used in financing activities Net increase (decrease) in cash Cash balance at prior year-e Cash balance at current year-end 202,010 nd 202,010