At June 30 Assets IKIBAN INCORPORATED Comparative Balance Sheets Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Equipment Accumulated 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 Sales Cost of goods sold IKIBAN INCORPORATED Income Statement 2021 $ 87,500 65,000 2020 $ 44,000 51,000 86,500 63,800 4,400 5,400 220,700 186,900 124,000 (27,000) 115,000 $ 317,700 $ 25,000 6,000 (9,000) $ 292,900 $ 30,000 15,000 3,800 3,400 34,400 48,800 30,000 60,000 64,400 108,800 220,000 33,300 160,000 24,100 $ 317,700 $ 292,900 For Year Ended June 30, 2021 $ 678,000 411,000 267,000 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 67,000 58,600 141,400 2,000 143,400 43,890 $ 99,510 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 $57,600 cash. d. Received cash for the sale of equipment that had cost $48,600, yielding a $2,000 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. Required: (1) Prepare a statement of cash flows using the indirect method for the year ended June 30, 2021. Note: Amounts to be deducted should be indicated with a minus sign. IKIBAN, INCORPORATED Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2021 Cash flows from operating activities Net income 99,510 Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Depreciation expense Gain on sale of plant assets 58,600 (2,000) 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 Net cash provided by operating activities Cash flows from investing activities Cash received from sale of equipment Cash paid for equipment Cash flows from financing activities (14,000) 22,700 1,000 (5,000) (9,000) (400) $ 151,410 14,600 (57,600) (43,000) 0