[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, 2017 and 2016
	2017				2016
Assets
Cash	$	94,300			$	66,000
Accounts receivable, net		98,000				73,000
Inventory		85,800				119,500
Prepaid expenses		6,600				9,800
Total current assets		284,700				268,300
Equipment		146,000				137,000
Accum. depreciationEquipment		(38,000	)			(20,000	)
Total assets	$	392,700			$	385,300
Liabilities and Equity
Accounts payable	$	47,000			$	63,000
Wages payable		8,200				19,400
Income taxes payable		5,600				8,200
Total current liabilities		60,800				90,600
Notes payable (long term)		52,000				82,000
Total liabilities		112,800				172,600
Equity
Common stock, $5 par value		264,000				182,000
Retained earnings		15,900				30,700
Total liabilities and equity	$	392,700			$	385,300

IKIBAN INC. Income Statement For Year Ended June 30, 2017
Sales				$	788,000
Cost of goods sold					433,000
Gross profit					355,000
Operating expenses
Depreciation expense	$	80,600
Other expenses		89,000
Total operating expenses					169,600
					185,400
Other gains (losses)
Gain on sale of equipment					4,200
Income before taxes					189,600
Income taxes expense					46,090
Net income				$	143,510

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 $79,600 cash.
4. Received cash for the sale of equipment that had cost $70,600, yielding a $4,200 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 for the year ended June 30, 2017, using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

IKIBAN, INC. Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2017 Cash flows from operating activities Net income $ 143,510 Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Gain on sale of plant assets (4,200) Depreciation expense 80,600 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) (2,600) Net cash provided hv operating activities | $ 202 0101 - -- ------ - -- - - - Decrease in income taxes payable (2.600) $ 202,010 Net cash provided by operating activities Cash flows from investing activities Cash received from sale of equipment Gain on sale of plant assets Cash paid for operating expenses Cash flows from financing activities Cash paid for dividends Cash paid to retire notes Cash received from stock issuance Cash paid for operating expenses $ 202,010 Net increase (decrease) in cash Cash balance at prior year-end Cash balance at current year-end 202,010