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[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,

[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 $ 83,900 $ 50,000
Accounts receivable, net 74,000 57,000
Inventory 69,800 95,500
Prepaid expenses 5,000 6,600
Total current assets 232,700 209,100
Equipment 130,000 121,000
Accum. depreciationEquipment (30,000 ) (12,000 )
Total assets $ 332,700 $ 318,100
Liabilities and Equity
Accounts payable $ 31,000 $ 39,000
Wages payable 6,600 16,200
Income taxes payable 4,000 5,000
Total current liabilities 41,600 60,200
Notes payable (long term) 36,000 66,000
Total liabilities 77,600 126,200
Equity
Common stock, $5 par value 232,000 166,000
Retained earnings 23,100 25,900
Total liabilities and equity $ 332,700 $ 318,100

IKIBAN INC. Income Statement For Year Ended June 30, 2017
Sales $ 708,000
Cost of goods sold 417,000
Gross profit 291,000
Operating expenses
Depreciation expense $ 64,600
Other expenses 73,000
Total operating expenses 137,600
153,400
Other gains (losses)
Gain on sale of equipment 2,600
Income before taxes 156,000
Income taxes expense 44,490
Net income $ 111,510

Additional Information

A $30,000 note payable is retired at its $30,000 carrying (book) value in exchange for cash.

The only changes affecting retained earnings are net income and cash dividends paid.

New equipment is acquired for $63,600 cash.

Received cash for the sale of equipment that had cost $54,600, yielding a $2,600 gain.

Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.

All purchases and sales of inventory are on credit.

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.)

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