The following financial statements and additional information are reported. IKIBAN INCORPORATED Comparative Balance Sheets At June 30 2021 2020 Assets Cash Accounts receivable, net Prepaid expenses $ 106,900 $ 45,000 66,500 52,000 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 64,800 88,000 4,500 5,600 242,700 190,600 125,000 116,000 (27,500) (9,500) $ 340,200 $ 26,000 6,100 $ 297,100 $ 31,500 15,200 3,500 4,000 35,600 50,700 31,000 61,000 66,600 111,700 222,000 161,000 Retained earnings 51,600 24,400 Total liabilities and equity $ 340,200 $ 297,100 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 Additional Information $ 683,000 412,000 271,000 68,000 59,600 143,400 2,100 145,500 43,990 $ 101,510 a. A $30,000 notes 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 equipme