Reference no: EM132950898

Question - The following financial statements and additional information are reported.

IKIBAN INC. Comparative Balance Sheets June 30, 2019 and 2018

2019 2018

Assets

Cash $100,900 $55,000

Accounts receivable, net 81,500 62,000

Inventory 74,800 103,000

Prepaid expenses 5,500 7,600

Total current assets 262,700 227,600

Equipment 135,000 126,000

Accum. depreciation-Equipment (32,500) (14,500)

Total assets $365,200 $339,100

Liabilities and Equity

Accounts payable $36,000 $46,500

Wages payable 7,100 17,200

Income taxes payable 4,500 6,000

Total current liabilities 47,600 69,700

Notes payable (long term) 41,000 71,000

Total liabilities 88,600 140,700

Equity

Common stock, $5 par value 242,000 171,000

Retained earnings 34,600 27,400

Total liabilities and equity$365,200 $339,100

IKIBAN INC. Income Statement For Year Ended June 30, 2019

Sales $733,000

Cost of goods sold 422,000

Gross profit 311,000

Operating expenses

Depreciation expense $69,600

Other expenses 78,000

Total operating expenses 147,600

163,400

Other gains (losses)

Gain on sale of equipment 3,100

Income before taxes 166,500

Income taxes expense 44,990

Net income $121,510

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 $68,600 cash.

4. Received cash for the sale of equipment that had cost $59,600, yielding a $3,100 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.

Required - Prepare a statement of cash flows using the indirect method for the year ended June 30, 2019.