The following financial statements and additional information are reported. IKIBAN INC. Comparative Balance Sheets June 30, 2019 and 2018 2019 2018 $106,300 68,000 65,800 4,600 244,700 126,000 (28,000) $342,700 $ 46,000 53,000 89,500 5,800 194,300 117,000 (10,000) $301,300 Assets Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accum. 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 Retained earnings Total liabilities and equity $ 27,000 6,200 3,600 36,800 32,000 68,800 $ 33,000 15,400 4,200 52,600 62,000 114,600 224,000 49,900 $342,700 162,000 24,700 $301,300 IKIBAN INC. Income Statement For Year Ended June 30, 2019 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $60,600 Other expenses 69,000 Total operating expenses $ 688,000 413,000 275,000 129,600 145,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income 2,200 147,600 44,090 $ 103,510 Additional Information $3000 nate payable is retired at its $30,000 carrying (book) value in exchange for cash. 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 $59,600 cash. d. Received cash for the sale of equipment that had cost $50,600. yielding a $2,200 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 Required: (1) Prepare a statement of cash flows using the indirect method for the year ended June 30, 2019. (Amounts to be deducted should be indicated with a minus sign.) IKIBAN, INC. Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2019 Cash flows from operating activities Net income $ 147,600 Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Depreciation expense 60.600 Loss on sale of plant assets (2 200) Cash paid for operating expenses 206.000 Changes in current operating assets and liabilities Decrease in accounts receivable (15,000) Decrease in inventory 23,700 Decrease in prepaid expenses 1,200 Decrease in accounts payable (6,000) Decrease in wages payable (9,200) Cash received from customers 200,700 Increase in income taxes payable 44,690 $ Cash flows from investing activities Gain an eale nf nlant accate 159 AM 652 090 Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Depreciation expense 60.600 Loss on sale of plant assets (2,200) Cash paid for operating expenses 206,000 Changes in current operating assets and liabilities Decrease in accounts receivable (15,000) Decrease in inventory 23.700 Decrease in prepaid expenses 1.200 Decrease in accounts payable (6.000) Decrease in wages payable (9.200) Cash received from customers 200,700 Increase in income taxes payable 44 690 $ Cash flows from investing activities Gain on sale of plant assets (59.600) Cash received from sale of equipment 10,200 652,090 (49,400) Cash flows from financing activities Cash paid to retire notes Cash received from stock issuance Cash paid for dividends (30,000) 62,000 (78,310) (46,310) 556 380 $ Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end 46 000 $ 612 380