[The following information applies to the questions displayed below.] The following financial statements and additional information are reported.

IKIBAN INC. Comparative Balance Sheets June 30, 2019 and 2018
	2019				2018
Assets
Cash	$	97,900			$	60,000
Accounts receivable, net		89,000				67,000
Inventory		79,800				110,500
Prepaid expenses		6,000				8,600
Total current assets		272,700				246,100
Equipment		140,000				131,000
Accum. depreciationEquipment		(35,000	)			(17,000	)
Total assets	$	377,700			$	360,100
Liabilities and Equity
Accounts payable	$	41,000			$	54,000
Wages payable		7,600				18,200
Income taxes payable		5,000				7,000
Total current liabilities		53,600				79,200
Notes payable (long term)		46,000				76,000
Total liabilities		99,600				155,200
Equity
Common stock, $5 par value		252,000				176,000
Retained earnings		26,100				28,900
Total liabilities and equity	$	377,700			$	360,100

IKIBAN INC. Income Statement For Year Ended June 30, 2019
Sales				$	758,000
Cost of goods sold					427,000
Gross profit					331,000
Operating expenses
Depreciation expense	$	74,600
Other expenses		83,000
Total operating expenses					157,600
					173,400
Other gains (losses)
Gain on sale of equipment					3,600
Income before taxes					177,000
Income taxes expense					45,490
Net income				$	131,510

Additional Information

1. A $30,000 note payable is retired at its $30,000 carrying (book) value in exchange for cash.
2. The only changes affecting retained earnings are net income and cash dividends paid.
3. New equipment is acquired for $73,600 cash.
4. Received cash for the sale of equipment that had cost $64,600, yielding a $3,600 gain.
5. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.
6. All purchases and sales of inventory are on credit.

Exercise 12-11 Part 1

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.)