The following financial statements and additional information are reported. IKIBAN INCORPORATED Comparative Balance Sheets. At June 30 Assets Cash Accounts receivable, net Prepaid expenses 2021 2020 $ 95,500 95,000 $ 64,000 Inventory Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity 83,800 71,000 116,500 6,400 9,400 280,700 260,900 144,000 (37,000) 135,000 (19,000) $ 387,700 Accounts payable $ 45,000 Wages payable 8,000 Income taxes payable 5,400 $ 376,900 $ 60,000 19,000 7,800 Total current liabilities 58,400 86,800 Notes payable (long term) 50,000 80,000 Total liabilities 108,400 166,800 Equity Common stock, $5 par value 260,000 180,000 Retained earnings 19,300 30,100 Total liabilities and equity $ 387,700 $ 376,900 Sales Cost of goods sold Gross profit IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 $ 778,000 431,000 347,000 87,000 78,600 181,400 4,000 185,400 45,890 Operating expenses (excluding depreciation). Depreciation expense Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense Net income Additional Information $ 139,510 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 equipment is acquired for $77,600 cash. d. Received cash for the sale of equipment that had cost $68,600, yielding a $4,000 gain. e. Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement. f. All purchases and sales of inventory are on credit. The following financial statements and additional information are reported. IKIBAN INCORPORATED Comparative Balance Sheets. At June 30 Assets Cash Accounts receivable, net Prepaid expenses 2021 2020 $ 95,500 95,000 $ 64,000 Inventory Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity 83,800 71,000 116,500 6,400 9,400 280,700 260,900 144,000 (37,000) 135,000 (19,000) $ 387,700 Accounts payable $ 45,000 Wages payable 8,000 Income taxes payable 5,400 $ 376,900 $ 60,000 19,000 7,800 Total current liabilities 58,400 86,800 Notes payable (long term) 50,000 80,000 Total liabilities 108,400 166,800 Equity Common stock, $5 par value 260,000 180,000 Retained earnings 19,300 30,100 Total liabilities and equity $ 387,700 $ 376,900 IKIBAN INCORPORATED Income Statement For Year Ended June 30, 2021 $ 778,000 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 431,000 347,000 87,000 78,600 181,400 4,000 185,400 45,890 $ 139,510 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 equipment is acquired for $77,600 cash. d. Received cash for the sale of equipment that had cost $68,600, yielding a $4,000 gain. e. Prepaid Expenses and Wages Payable relate to Operating Expenses on the income statement. f. All purchases and sales of inventory are on credit.